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The Final AHP Rules Take a Hard Hit (Part 2)

By: Erin M. Hussey, Esq.

In our previous blog post, The Final AHP Rules Take a Hard Hit, we discussed the court decision that vacated (1) the bona fide provisions (including the provisions about a substantial business purpose, control, and the expanded commonality of interest requirements), and (2) the working owner provisions from the Final Rule on Association Health Plans (“AHPs”). The court remanded their decision to the Department of Labor (“DOL”) to determine how this ruling would affect the rest of the Final Rule given the severability clause. The DOL has provided an initial response via Question and Answers (“Q&As”). Those DOL Q&As detail the following:

“The  Department disagrees with the District Court’s ruling and is considering all available options in consultation  with  the  Department  of  Justice  including  the  possibility  of  appealing  the  District  Court’s decision and the possibility of requesting that the District Court stay its decision pending an appeal.  At this time, we have not reached a decision on how to proceed.”

As such, without any action from the DOL, it appears the above-noted bona-fide and working owner provisions remain inoperative. However, the House and Senate have taken matters into their own hands. On April 11th, Sen. Mike Enzi (R-WY) and Lamar Alexander (R-TN) introduced a bill in order to protect the AHP Final Rule (S. 1170). The text of the bill is not available yet but will be made available here: https://www.govtrack.us/congress/bills/116/s1170. Sen. Enzi noted the following in his statement on the legislation:

“I rise to introduce the Association Health Plans Act of 2019 . . . My bill will simply codify the Labor Department's final rule to provide certainty for current enrollees and to ensure the pathway remains available for new association health plans to form.”

The following day, on April 12th, U.S. Representative Tim Walberg (MI-07), joined by Rep. Michael C. Burgess, M.D. (TX-26) and Rep. Virginia Foxx (NC-05), introduced the Association Health Plans Act of 2019 (H.R. 2294). The text of that bill is not available yet but will be made available here:  https://www.congress.gov/bill/116th-congress/house-bill/2294.

While it is unlikely these bills will get bipartisan support, this legislation will be something to keep in mind while we await the ultimate outcome of the AHP Final Rule. If you need help understanding AHP's or self-funded health plans please contact us, today!