The U.S. Department of Labor (DOL) published a final rule on association health plans (AHP) that facilitates the wider adoption and administration of AHPs. The final rule largely adopts changes included in the January proposed rule, which will make it easier for small business owners, their employees, sole proprietors and other self-employed people to join together and create an AHP and be treated as a large group plan, which would exempt them from certain Affordable Care Act (ACA) requirements such as providing the essential health benefits.

AKF submitted a comment letter that expressed our significant concerns with the proposed rule, including our belief that expanding the use of AHPs would potentially weaken the level of meaningful health coverage available to individuals with a chronic disease, as these plans seek to offer less comprehensive coverage that excludes benefit categories required for ACA-compliant plans. AKF and other stakeholders, including insurers, actuaries and patient advocacy groups, also warned that AHPs could siphon off healthier workers, leading to higher premiums in small group and individual markets. Some business groups supported the rule, arguing that it will give employers more flexibility in coverage options at lower costs.

Following the release of the final rule, a coalition of attorneys general from 11 states and the District of Columbia filed a federal complaint against the administration over the regulation. The suit charges the final rule violates the Administrative Procedures Act, the ACA and the Employee Retirement Income Security Act (ERISA), and asks the court to vacate the rule. The complaint also argues the intent of the regulation is to undermine the ACA, and that could harm consumer protections.