Court Blocks Expanded Access to Association Health Plans

April 11, 2019

On March 28, a federal judge struck down portions of the U. S. Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) final rule intended to expand access to association health plans (AHPs) and increase flexibility for small employers to join groups or associations to offer insured health coverage in the large group market at potentially more favorable pricing with less restrictive requirements. U.S. District Judge John Bates of Washington, D.C., ruled that the bona fide association and working owner provisions exceeded the statutory authority delegated in ERISA, the Employee Retirement Income Security Act, and that the DOL rule "was intended and designed to end run the requirements of the ACA," the Affordable Care Act. Citing to a severability provision in the Final Rule, the judge has remanded the rule to the DOL to determine whether it can be saved without the invalidated provisions. Unless the ruling is reversed on appeal, this ruling will replace the prior restrictions on establishing AHPs under ERISA.

A number of AGC Chapters across the country already recognized the need to offer alternative health care options and for years have established AHPs that offer “group health plan” coverage to employees of members. AGC does not currently foresee this ruling impacting any Chapter-sponsored health plans established prior the issuance of the final rule or those following the old guidance.  Chapter-sponsored plans established under the new guidance should seek counsel to assess any impact, especially if plans included working owners.

For more information, contact Claiborne Guy at or 703-837-5382.

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