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DOL Appeals Circuit Court Decision Striking Down AHPs

DOL Appeals Circuit Court Decision Striking Down AHPs

Last month, we reported on the D.C. Circuit Court decision striking down the recently expanded criteria for establishing Association Health Plans (AHPs). The decision did not affect older guidance on establishing AHPs and plans are still permitted to form AHPs utilizing those stricter requirements.

As a reminder, last year the Department of Labor (DOL) issued guidance expanding access to Association Health Plans (AHPs) for the purpose of allowing unrelated employers to band together to purchase health insurance.

That rule was developed in response to Executive Order 13813, issued in October 2017, from President Donald Trump that directed the Secretary of Labor to expand access to health coverage through the use of AHPs, short-term limited duration insurance, and health reimbursement arrangements.

After the D.C. Circuit Court decision, the DOL could either appeal the decision or revise its AHP guidance. On Monday, the DOL issued a response to the Circuit Court ruling, announcing that they have formally filed a notice of appeal.

Additionally, the DOL outlined its position regarding AHPs already formed utilizing the new rules, announcing that they will take a position of non-enforcement toward those entities formed in good faith upon that guidance.

While previously formed AHPs may no longer market to and sign up new employer members, the DOL expressed the position that those already participating in an AHP formed under the now struck down guidance may continue to receive coverage through those organizations through the end of the plan year, or contract term if longer, in effect at the time of the Circuit Court decision. 

We will be sure to update this post as updates become available. To view the DOL’s statement in it’s entirety, click here.