On May 2, 2019, the Department of Labor (DOL) released a policy statement regarding Association Health Plans (AHPs). The Department disagrees with the recent district court’s ruling in The State of New York v. United States Department of Labor. Pending appeal, the DOL will not pursue enforcement actions against parties for potential violations stemming from actions taken in good faith reliance on the Trump-era AHP rule’s validity and may continue in the AHP through the remainder of the applicable plan year or contract term.
The statement also promises to work with the Department of Health and Human Services (HHS, States, plan fiduciaries, employers and service providers for the wide variety of other compliance-related issues and concerns that result from the court ruling – to mitigate any disruptions or hardships that result from confusion regarding the status of the AHP rule and legal compliance requirements.
Action Required
Action may be required for some association health plans to prepare for any needed changes to the AHP in the next plan year–which will most likely include shutting down the AHP if not meeting Obama-era AHP definitions of eligible employers. Employers that are participating in an AHP in an association of unrelated employers – by industry or region – you may be effected. Plan sponsors in association health plans, particularly those in new ones formed under the Trump-era rules, should keep abreast of the ever-changing association health plan climate. The Leavitt Group compliance team will be sure to issue an Employee Benefits Compliance Alert as developments occur. Be sure to subscribe!
Additional Resources
Leavitt Group Article on District Court Ruling Throwing out Part of Trump-era AHP
Leavitt Group Article on Rule Expanding AHP under Trump
Department of Labor’s Employee Benefits Security Administration (EBSA) Statement