On Jan. 5, 2018, the Department of Labor (DOL) published a proposed rule that would give small businesses and sole proprietors more freedom to join together as a single group to purchase health insurance in the large group market or to selfinsure. These benefit arrangements are called association health plans (AHPs).
The proposed rule would broaden the criteria for determining which employers may band together to form AHPs. Under the proposal, employers could form an AHP if they are in the same industry or have a principal place of business in the same state or metropolitan area.
The proposed rule would also allow working owners, such as sole proprietors, to join AHPs. The proposed rule includes requirements for AHPs that are intended to distinguish them from commercial insurance-type arrangements and prevent adverse selection.
The DOL’s changes for AHPs are only proposed at this point. It is possible that the DOL will change the proposal before it is finalized, based on comments it receives on the proposed rule. Small employers and sole proprietors who are interested in AHPs should monitor the proposed rule for developments.