The Department of Labor published a final rule on June 21, 2018 creating flexibilities for employers to band together to sponsor a single Association Health Plan (AHP) The final rule allows multiple employers to jointly sponsor a single group health plan by expanding ERISA’s definition of ’employer’. By collectively forming a single plan, multiple employers may avoid small group market rating, maintain greater flexibility in benefits and reduce premiums and administrative expenses. An AHP is a multiple employer welfare arrangement (MEWS) and is subject to the same federal and state rules as any other MEWAs. Keep in mind that the ‘association’ sponsoring the AP must be a viable entity beyond simply providing health insurance coverage and must demonstrate a substantial business purpose for existing. Sounding too good to be true? Too soon to tell: Because the Federal government allows it doesn’t require local insurers to change their underwriting requirements to insure these ‘associations’. Most of our local carriers dissolved their old associations and have streamlined their systems to cut administrative costs. It remains to be seen if the carriers want to spend the necessary funds to recreate them. Pennsylvania will likely give guidance in due time. The carriers are monitoring but not jumping in quickly. We’ll keep you alerted as information from the carriers becomes available. Here’s a link to a podcast just released with more information: http://emersonreid.dmplocal.com/sites/1037/bmccompliance.html
