The Labor Department is proposing a rule that would set criteria for employer associations to sponsor association health plans that qualify as employee welfare benefit and group health plans under the Employee Retirement Income Security Act.
Received by the Office of Information and Regulatory Affairs Aug. 11, the rule is under review. ERISA outlines minimum standards for employee benefit plans.
While the proposal currently lacks specifics, it comes amid ACA enhanced subsidy expiration and insurer proposals for steeper ACA rates. A Peterson-KFF Health System Tracker analysis found insurers are proposing a median premium increase of 15% for 2027. The ACA individual market risk pool has been getting smaller and sicker, as well, according to a July report from healthcare consulting firm Wakely.
The first Trump administration surfaced a similar rule in 2018, but a federal court vacated some provisions the following year. The Biden administration eventually walked back the rule in 2024, due to association health plans not having to provide some ACA protections.
The 2018 rule permitted self-employed people to participate in association health plans, a point of contention in that litigation. That rule also allowed association health plans to form based on geography, rather than industry.
Becker’s contacted the Labor Department and will update this story if more information becomes available.
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