The Labor Department (DOL) today issued a final rule intended to encourage and facilitate the establishment of Association Health Plans (AHPs) under the Employee Retirement Income Security Act (ERISA).

The final regulation sets new criteria for defining an employer for purposes of sponsoring a single multiple-employer "employee welfare plan," and a "group health plan." By establishing a more flexible "commonality of interest" test for employer members and removing restrictions on the establishment and maintenance of AHPs, the DOL says the regulation "facilitates the adoption and administration of AHPs and expands access to affordable health coverage," especially among small employers and self-employed individuals.

The final rule includes criteria that "permit, solely for purposes of Title I of ERISA, certain working owners of an incorporated or unincorporated trade or business, including partners in a partnership, without any common law employees, to qualify as employers for purposes of participating in a bona fide group or association of employers sponsoring an AHP and also to be treated as employees with respect to a trade, business or partnership for purposes of being covered by the AHP," the DOL explains.

The new rule will not affect previously existing AHPs operating under prior guidance. Such plans can continue or elect to follow the new rules "if they want to expand within a geographic area, regardless of industry, or to cover the self-employed," a DOL press release explains. A newly launched AHP can elect to follow either the prior guidance or the new rules.

The DOL outlined the following timeline for implementation: 

• All associations (new or existing) may establish a fully-insured AHP on September 1, 2018;
• Existing associations that sponsored an AHP on or before the date the Final Rule was published may establish a self-funded AHP on January 1, 2019; and
• All other associations (new or existing) may establish a self-funded AHP on April 1, 2019. 

A DOL press release is posted here.

A DOL fact sheet is posted here.

A set of frequently asked questions issued by the DOL is posted here.

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