On June 19, 2018, the U.S. Department of Labor implemented a rule to allow Association Health Plans that expands health coverage options for America’s small businesses and their employees.
Association Health Plans allow small businesses, including self-employed workers, to band together by geography or industry to obtain healthcare coverage as if they were a single large employer.
How do Association Health Plans work?
- Association Health Plans (AHPs), under the Department of Labor’s rule, are group health plans that employer groups and associations offer to provide health coverage for employees.
- AHPs allow small employers to band together to purchase the types of coverage that are available to large employers, which can be less expensive and better tailored to the needs of their employees.
- The rule allows more employer groups and associations to form AHPs, based on common geography or industry.
- An AHP could offer coverage to some or all employers in a state, city, county, or a multi-state metro area, or it could offer coverage to businesses in a trade or industry group nationwide.
- For the first time, working owners without other employees (including sole-proprietors) and their families will be permitted to join AHPs, creating a new path for these hardworking Americans to access affordable, quality health coverage.
- Self-employed individuals who employ other individuals have always been able to join an AHP.
- Under the rule, self-employed individuals with no other employees can also join an AHP, along with their families.
- Existing plans can continue to operate as before, or elect to follow the new requirements if they want to expand within a geographic area, regardless of industry, or to cover the self-employed.
Are AHPs subject to consumer protections?
- The rule includes important safeguards. Consumer protections and healthcare anti-discrimination protections apply to large businesses and will also apply to AHPs organized under this rule.
- AHPs may not charge higher premiums or deny coverage to people because of pre-existing conditions, or cancel coverage because an employee becomes ill.