AHPs were created in 2017 by President Donald J. Trump’s Executive Order, and the Department of Labor (DOL) expanded on them in 2018.  The goal was to promote healthcare choice and competition across the United States.  The changes allowed unrelated small businesses to join together to get better underwriting and avoid certain mandates.

However, a federal judge recently struck down a part of the Trump Administration’s AHP rules.  The judge said “The Final Rule was intended and designed to end-run the requirements of the ACA, but it does so only by ignoring the language and purpose of both ERISA and the ACA.  DOL unreasonably expands the definition of “employers” to include groups without any real commonality of interest and to bring working owners without employees within ERISA’s scope despite Congress’s clear intent that ERISA cover benefits arising out of employment relationships.  Accordingly, these provisions are unlawful and must be set aside…”  This fiasco is the result of changing the rules with an executive order rather than through well-crafted legislation.

The ruling did not address all of the AHP rules – only the provisions defining “employer” to include associations of disparate employers and expanding membership in these associations to include working owners without employees.

It is premature to know what action the administration and the DOL will take.  Hopefully, more guidance will be released soon.