Labor Rescinds 2018 Association Health Plan Final Rule

The Department of Labor on April 29 issued a final rule rescinding a 2018 final rule that broadened the definition of employer under the Employee Retirement Income Security Act of 1974 (ERISA, P.L. 93-406). By broadening the definition of employer, the 2018 final rule allowed small businesses and other groups of employers to join together and form an association for the sole purpose of offering association health plans (AHPs) [refer to Washington Highlights, June 22, 2018]. These plans were exempt from individual and small group market consumer-protection requirements, such as coverage of the ten required essential health benefits under the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152). The AAMC had opposed finalization of the 2018 rule, expressing concerns it would leave patients with inferior health insurance coverage, potentially limiting access to care, and leave providers who treat these patients either underpaid or not paid at all [refer to Washington Highlights, March 8, 2018]. 

In the new final rule, the department cites a 2019 federal district court ruling invalidating the 2018 rule, as well as the administration’s desire to ensure that the AHP rules are consistent with ERISA’s statutory text. The Labor Department rescinded the entirety of the 2018 final rule, reverting to its longstanding pre-rule guidance on health plans.