The Department of Labor (DOL) has issued a Notice of Proposed Rulemaking (NPRM), in accordance with an Executive Order issued by the President, that would expand access to health coverage through Association Health Plans (AHPs). The rule broadens the definition of “employer” to include “working owners” (sole proprietors/self-employed) under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA is a federal law governing the conduct of employee benefit plans, including employer-sponsored group health plans, which sets minimum standards and protections for participants.
By expanding access to AHPs, more small businesses and self-employed individuals participating in an AHP will no longer be subject to Affordable Care Act (ACA) small group and individual market rules, such as certain benefit requirements that may increase costs. Most AHPs will still be subject to state benefit mandates, but forming AHPs will give small employers and self-employed individuals more flexibility in health plan design, which may result in lower costs. The proposed rule also broadens the DOL “commonality of interest” test, which allows for more employers to band together if they either are: (i) in the same trade, industry, line of business, or profession; or (ii) have a principal place of business within a region that does not exceed the boundaries of the same State or the same metropolitan area.
NAR will be submitting a comment on the proposed rule, due on March 6, advocating for broad inclusion of self-employed individuals in AHPs. After the public comment period ends, DOL will review the submitted comments and issue a final rule. It is anticipated that legal challenges will also result for overturning previous DOL interpretations, which may further elongate finalization of the rule.
As NAR staff assesses the proposed rule and the potential impact for members, advocacy efforts will remain focused on helpful reforms to the health insurance markets that self-employed individuals and small employers depend upon for coverage.
For more information on the proposed rule, please see the background summary.
To submit a comment on the proposed rule, please visit the Federal Register page.
For more information on NAR’s advocacy efforts, please visit NAR's Health Care Reform topic page.
For background on insurance challenges for independent contractors, please visit our blog post.