Rescission of Association Health Plan Rule: What it Means for Small Businesses and the Self-Employed

The Department of Labor is expected to issue a final rule in the near future that will determine who is eligible to use association health plans. This rule, known as 1210-AC16, was approved by the White House Office of Management and Budget on April 22 and will have significant implications for how these plans are structured and who can participate in them.

The proposed rule from December 2023 seeks to overturn a rule put in place during the Trump administration in 2018, which broadened the definition of “employer” to allow self-employed individuals and a greater number of small employers to join together in order to purchase health insurance. This new rule will likely impact many small businesses and self-employed individuals who have relied on association health plans for more affordable healthcare options.

Small businesses and self-employed individuals have praised association health plans as a more affordable option compared to other employer-sponsored plans. However, the completion of the review process for the final rule marks a significant development in the ongoing debate over these plans and their role in providing healthcare coverage for small businesses and the self-employed.

The decision to rescind the previous rule is likely to be closely watched as the Department of Labor moves forward with its formal issuance of the new rule. The implications of this decision will be significant, as it will determine who is eligible to use association health plans and how these plans will be structured moving forward.