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Department of Labor: Association Health Plan Final Regulations

Sikich

Aug 22 2018

2 min read

Associations now have new options to sponsor health plans for their members. These final Association Health Plan (AHP) regulations make it easier for small businesses to offer large employer plans that would be free from Affordable Care Act (ACA) mandates (applicable only to individual and small group insurance plans).

What the AHP Regulations Mean

This new regulation is a revision of former DOL guidance on what constitutes a “commonality of interest,” which association members share if:

They are in the same trade, industry, line of business or profession,
Or, are located in the same state or metropolitan area even if that area includes more than one state.

AHPs must also meet the following requirements to be valid under the new regulations:

Purpose/Sponsorship: There must be at least one substantial business purpose unrelated to providing health coverage or other employee benefits to its members and their employees.
Control: Activities of the association must be controlled by members, and the group or association’s members that participate in the group health plan must control the plan.
Eligible AHP participants are defined are employees of a current employer member of the group or association. Former employees of current ones are grandfathered in.

These regulations, however, do not apply to existing AHPs that follow the previous guidance. This is because they created their operations with the former guidance in mind and may have a hard time complying with and meeting all the requirements of the new regulations.

As with many new regulations, there are several provisions requiring additional guidance. Employers should thoroughly review these new provisions prior to embarking on a change in their health care arrangement. For more information about the AHP final regulations and how they affect you, please consult with the Sikich professional employee benefit plans team.

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. In addition, this publication may contain certain content generated by an artificial intelligence (AI) language model. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

About the Author

Sikich

Sikich is a global company specializing in technology-enabled professional services. With more than 1,900 employees, Sikich draws on a diverse portfolio of technology solutions to deliver transformative digital strategies and is comprised of one of the largest CPA firms in the United States. From corporations and not-for-profits to state and local governments and federal agencies, Sikich clients utilize a broad spectrum of services* and products to help them improve performance and achieve long-term, strategic goals. *Securities offered through Sikich Corporate Finance LLC, member FINRA/SIPC. Investment advisory services offered through Sikich Financial, an SEC Registered Investment Advisor. 