On June 19, 2018, the Department of Labor (DOL) released a final rule that gives small businesses more freedom to join together as a single group to purchase health insurance in the large group market or to self-insure. These benefit arrangements are called association health plans (AHPs). AHPs have been available to small employers, but the Final Rule offers new options.
AHPs are a type of multiple employer welfare arrangement (MEWA). Because AHPs are regulated at the federal and state level, the availability of these plans will also depend on a state’s regulatory approach. ERISA allows states to regulate MEWAs under their own insurance laws and regulations. For example, to guard against fraud and abuse, a number of states provide that self-insured MEWAs must be licensed, registered, have a minimum number of participating employers, obtain an actuarial opinion that the MEWA can meet promised benefits and keep a minimum level of reserves. Several states prohibit self-insured MEWAs altogether.
The final rule allows fully insured plans to begin operating under the new rule on Sept. 1, 2018. Existing self-insured AHPs can begin operating under the new rule on Jan. 1, 2019, and new self-insured AHPs can begin on April 1, 2019.
Refer to the below Compliance Bulletin and Fact Sheet for details and contact your NEEBCo representative with questions.