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Both the IRS and Department of Labor (DOL) have issued new compliance guidance for association health plans (AHPs). On June 21, 2018, the DOL published a final rule that expands the ability of employers to join together to form AHPs. According to the DOL, these changes will expand access to affordable, high-quality health insurance coverage for small businesses.

The new guidance issued provides that:

  • Participating in an AHP does not cause a small employer to become subject to the Affordable Care Act’s (ACA) employer shared responsibility rules.
  • An AHP is a group health plan and a multiple employer welfare arrangement that is subject to ERISA’s requirements.

The final rules will become effective on the following dates:

  • Sept. 1, 2018—Final rule applies to fully insured AHPs. 
  • Jan. 1, 2019—Final rule applies to existing self-insured AHPs.
  • April 1, 2019—Final rule applies to new self-insured AHPs.


Action Steps

Small employers that are considering joining an AHP should understand their compliance obligations with respect to this type of plan. Although AHPs may avoid some ACA reforms for the small group market, these plans remain subject to many other legal requirements, including any applicable state regulations.

For more information on this guidance, please contact Emery Benefit Solutions today.