DOL moves to rescind Trump-era association health plan rule

Dive Brief:

  • The Biden administration announced a proposal Tuesday to rescind a 2018 rule that aimed to expand opportunities for some employers to enter into association health plans.
  • The 2018 rule, issued by the U.S. Department of Labor under former president Donald Trump, would have established additional criteria under the Employee Retirement Income Security Act for determining when multiple employers may join together to serve as the sponsor of a single, multiemployer health plan. Several states sued to block the rule, and in 2019, a federal judge vacated and remanded it.
  • DOL said in a press release that although the rule “was never fully implemented” and it is not aware of any existing association health plans formed based on the rule, it is nonetheless seeking to resolve uncertainty, allow for reexamination of association health plan sponsor criteria and ensure that its guidance is in alignment with ERISA.

Dive Insight:

The rule in question represented one of several efforts by the Trump administration to expand health insurance and coverage options for individuals and employers.

In 2017, Trump issued an executive order calling on federal agencies to issue regulations that would expand access to association health plans. The former president stated that doing so would particularly benefit hourly wage earners, farmers and employees of small businesses and entrepreneurs.

But the 2019 decision from Judge John D. Bates of the U.S. District Court for the District of Columbia held that the rule’s provisions were “unreasonable interpretations of ERISA” while the court characterized the rule as an “end run” around the requirements of the Affordable Care Act.

“The Department of Labor now believes that the provisions of the 2018 Association Health Plan Rule that the district court set aside as inconsistent with the Administrative Procedure Act and in excess of the department’s authority are, at a minimum, not consistent with the best reading of the statutory requirements governing group health plans,” Lisa Gomez, DOL’s assistant secretary for employee benefits security, said in the agency’s press release.