With breathtaking speed, Association Health Plans (AHPs) burst upon the health coverage landscape. Championing the plight of small employers regarding the cost of coverage, AHPs were to be “about more choice, more access and more coverage.” And so, the President issued Executive Order 13813 in October 2017 to advance them. The federal Department of Labor issued proposed rules in January 2018 to enable them. Wading through 900 public comments, final regulations were issued June 21 (the “Final Rule”), and went into effect August 20. Supplemental guidance was issued October 3. So what’s new? A change for the better? Few can agree.

Benefits Aplenty(?)

The biggest gain is for employers of all sizes (including solo proprietors) not previously tied together by common ownership or through an established association. These same employers can now qualify to form an AHP to obtain health benefits on a group basis. Breaking through these historic barriers, the Final Rule crafted additional advantages for AHPs. First, coverage through an AHP does not have to offer all 10 essential health benefits (a small group and individual coverage requirement), on the logic that when participating members are aggregated, the AHP qualifies as a large group. Next, The AHP does not need to satisfy the minimum value test for large groups, on the logic that while aggregated as a large group, all underlying members are small group and exempt.