DOL provides ERISA compliance assistance for association health plans

The Department of Labor has released an ERISA compliance assistance publication for newly-created association health plans (AHPs). In the publication, the DOL noted that ERISA sets standards of conduct for plan sponsors and employers that manage group health plans (including AHPs) and their assets.

New rule. In June 2018, the DOL issued a final rule which allows small employers to join together and gain many regulatory advantages enjoyed by large employers. AHPs will be able to serve employers in a city, county, state, or a multi-state metropolitan area, or a particular industry nationwide. Sole proprietors as well as their families will be permitted to join such plans. In addition to providing more choice, the rule makes insurance more affordable for small businesses, the DOL contends. Just like plans for large employers, these plans will be customizable to tailor benefit design to small businesses’ needs. These plans will also be able to reduce administrative costs and strengthen negotiating power with providers from larger risk pools and greater economies of scale.

ERISA compliance. The compliance assistance publication notes that AHPs are employee welfare benefit plans under ERISA. In general, an employee welfare benefit plan covered by ERISA is subject to reporting and disclosure requirements, claims procedure rules, and fiduciary rules. In addition, AHPs and other covered group health plans must comply with health care continuation coverage provisions under COBRA, and the health care protections provided in Health Insurance Portability and Accountability Act (HIPAA), the Patient Protection and Affordable Care Act, the Mental Health Parity and Addiction Equity Act, and other group health plan laws. The publication includes information on what newly-created AHPs need to do to comply with all of these various laws.

SOURCE: https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/publications/compliance-assistance-publication-ahp.pdf

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