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DOL Rule Expands Association Health Plan Access


  09:18:00 pm, by MedBen5   , 435 words,  
Categories: News, Health Care Reform, Self-funding

DOL Rule Expands Association Health Plan Access

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On June 19, 2018, the U.S. Department of Labor (DOL) released its final regulations expanding the definition of “employer” under ERISA Section 3(5). This seemingly simple change to an existing federal regulatory definition paves the way for the creation of additional Association Health Plans (AHPs) under ERISA and broadens the opportunity for health care plan coverage for small business owners and self-employed individuals. Prior to this Final Rule, AHPs existed but were subject to stricter regulatory criteria which limited the ways in which small employers could organize to form large group plans.

The DOL accomplished these changes by modifying its definition of “employer” under ERISA – the same definition that is used to define Multiple Employer Welfare Arrangements (or MEWAs). For purposes of ERISA, “employer” is defined as “any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan; and includes a group or association of employers acting for an employer in such capacity.” Prior to the Final Rule, the term “association” referred to a “bona fide” association which – having met certain criteria – would allow it to be treated as a single employer under ERISA.

Under ERISA, an employer can sponsor a single employee welfare benefit plan that provides benefits to its employees. However, grouping multiple single employers together to sponsor one plan triggers the ERISA MEWA rules along with complicated state regulatory requirements. The Final Rule does not eliminate the MEWA requirements, but it does expand the options for employers, including the self-employed, to band together to create a single association (or MEWA) health plan. The Final Rule also expands protections for AHP participants that are common in single-employer plans, such as covering preventive services at 100% and requiring compliance with the HIPAA non-discrimination rules.

While the Final Rule itself is effective August 20, 2018, the rules stagger applicability dates, as follows:

  • September 1, 2018 – The date the Final Rule becomes applicable for any existing fully-insured AHPs.
  • January 1, 2019 – The date the Final Rule becomes applicable for any existing self-funded AHPs that are already in compliance with the DOL’s previous sub-regulatory guidance on bona fide associations, and that choose to expand the association and its plan pursuant to the terms of the Final Rule (e.g., expand to a broader group of individuals, such as working owners without employees).
  • April 1, 2019 – The date the Final Rule becomes applicable for any new self-funded AHPs formed pursuant to and in compliance with the new rule.

Learn more about AHPs, MEWAs and the Final Rule by downloading a summary from MedBen clients with questions are welcome to contact Vice President of Compliance Caroline Fraker at (800) 851-0907 or

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