Reed Smith Client Alerts

The Department of Labor (“DOL”), in response to an Executive Order issued by the president on October 12, 2017, released a proposed rule on January 4, 2018, that would allow more employers to join together in an employer group or association to sponsor a group health plan, with the goal of expanding access to affordable health coverage, especially among small employers and self-employed individuals. Coverage available through these association health plans (AHPs) may avoid “essential health benefit” and other Affordable Care Act requirements applicable to smaller group and individual market plans.

Authors: Allison Warden Sizemore Shannon Mincemoyer

Under current guidance, it is difficult for small employers and the self-employed to band together to purchase health insurance coverage without having such coverage subject to the applicable small group or individual market requirements. Generally, this is because an association or group of employers does not qualify as an “employer” eligible to sponsor a single ERISA plan, unless it meets several requirements to be considered a bona fide association acting in the capacity of an employer.