Compliance Bulletin: FEDERAL COURT STRIKES DOWN ASSOCIATION HEALTH PLAN RULES

New Compliance Update.
OVERVIEW

On March 28, 2019, a federal judge ruled that parts of the Trump administration’s 2018 final rule on association health plans (AHPs) were invalid. The court directed the Department of Labor (DOL) to reconsider how the remaining provisions of the final rule are affected.

In its ruling, the court stated that the final rule was an “end-run” around the Affordable Care Act (ACA) and that the DOL exceeded its authority under ERISA.

The court specifically struck down two parts of the rule:

  • The provision defining “employer” to include associations of disparate employers; and
  • The provision expanding membership in these associations to include working owners without employees.
ACTION STEPS

Employers and business owners without employees that have joined an AHP, or are considering doing so, should review how their plans may be affected by the court’s ruling. These employers can also monitor developments from the DOL on any changes made to the rule.

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