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Health Care Reform Updates

DOL Proposal Encourages Creation of Association Health Plans

Posted on January 05 2018 05:16 PM

Rule Would Permit Associations Based on Industry or Geography

The U.S. Department of Labor (DOL) has issued a proposed rule which would allow employers to join together as a single group to offer group health insurance coverage to current employees, former employees, working owners, and their family members as part of an "association health plan." If finalized, the rule would allow association health plans to be formed on the basis of industry or geography, such as by state, city, county, or metropolitan area.

Notably, the proposed rule would subject association health plans to the nondiscrimination rules currently applicable to large group coverage under the Health Insurance Portability and Accountability Act (HIPAA), as amended by the Affordable Care Act (ACA). These rules prohibit discrimination based on a health factor or within groups of similarly situated individuals, but do generally permit plans to impose different eligibility provisions and costs based on bona-fide employment-based classifications, such as full-time versus part-time status.

Click here to read the proposed rule in its entirety.

For more on the nondiscrimination rules applicable to group health plans, check out our Health Insurance Nondiscrimination Rules page.