In a significant step towards expanding access to quality health coverage for more Americans, the Department of Labor announced today that the Employee Benefits Security Administration has issued a final rule aimed at strengthening healthcare protections for consumers in plans offered by small employers or available for purchase on the individual market. This decision aligns with the Biden-Harris administration’s goal of eliminating substandard insurance options and providing comprehensive, quality health coverage to all Americans.
The new rule rescinds the 2018 rule that expanded the availability of Association Health Plans, which did not have to comply with several important consumer protections under the Affordable Care Act. This move is part of a broader effort by the Biden-Harris administration to eliminate substandard insurance options, as seen in a recent final rule on short-term, limited-duration insurance. By rescinding this rule, the Department of Labor is sending a clear message that it will not tolerate insurance options that do not adequately protect consumers.
The final rule issued today also reverses the Trump administration’s criteria that made it easier for a group or association of employers to be treated as an “employer” when offering multiple-employer group health insurance. This change allowed more employers to offer health insurance coverage that bypassed critical ACA consumer protections. By rescinding this provision, the Department of Labor is ensuring that all group health plans are subject to federal consumer protection laws and regulations.
In 2019, the U.S. District Court for the District of Columbia invalidated parts of the 2018 rule, prompting the Department of Labor to reevaluate its provisions. Assistant Secretary for Employee Benefits Security, Lisa M. Gomez, stated that the department now believes these provisions are not consistent with statutory requirements governing group health plans. By rescinding this entire rule and maintaining longstanding pre-rule guidance on Association Health Plans that has been supported by numerous court decisions,