Deep Dive: Association Health Plan Considerations following the Court Order Vacating the DOL’s Final Rule
April 26, 2019
Authored by: Steve Evans and Charlene McHugh
On March 28, 2019, the Federal District Court for the District of Columbia issued an opinion and order vacating key portions of the Department of Labor’s regulation, published in June 2018, which had expanded the definition of “employer” under Section 3(5) of ERISA (the “AHP Rule”), thereby broadening the scope of association health plans (“AHPs”). According to the Court, it is unreasonable to interpret “employer” as including working owners and groups that do not have “a true commonality of interest” and doing so leads to “absurd results” and is an “end run” around the Affordable Care Act. The Court’s opinion was issued with immediate effect and has cast doubt on the future use of AHPs, especially self-insured AHPs.
As background, the AHP rule was promulgated in response to President Trump’s October 12, 2017, Executive Order, which directed the DOL to expand access to and