The U.S. Department of Labor (DOL) announced a new rule to the labor laws which will allow easier access to affordable health insurance plans for the self-employed, sole proprietors and their families. The “Association Health Plan” (AHP) will merge the gap between coverage for small and large businesses.
The new rule indicates two key changes…
1) Independent contractors, small companies or self-employed individuals with a shared industry or geographical location can now band together to form an association to purchase insurance. A regional Chamber of Commerce can now offer Association Plans to those members.
2) If you have two or more W2 employees, the business can now qualify for a group health plan. However, the employees cannot be family members but, the plans can extend to the insured family members.
According to DOL, the association must have at least one other reason to join together rather than for insurance purposes. For example, discussing professional interests or promoting a trade in the community. In addition, the rule must also follow current guidelines within the DOL. The association can not discriminate based on health factors, age or gender.
The rule evens the playing field and will make it easier for small businesses and those self-employed to purchase coverage separate from the Affordable Care Act. According to the Trump Administration, the plans will be more customizable to fit small businesses and decrease current costs for coverage.
Groups enrolled in an AHP now have more freedom for negotiation with the payers and providers. Current plans which exist under the AHP will not be affected. Business owners can choose to continue with those plans or follow the new requirements to seek other options.
In 2017, President Trump issued an executive order giving DOL 60 days to propose new rules to permit more employers to participate in AHP – specifically small business owners. DOL proposed a rule in January 2018 and the update to the AHP was passed on June 22nd. It will go into effect September 1stfor existing associations. New associations will be able to qualify for AHP in April of 2019.
For more information please visit the final rule on the AHP here.
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