Court Strikes Down Key Provisions of Association Health Plan Rule

A federal court has invalidated two key provisions of the U.S. Department of Labor's 2018 Association Health Plan (AHP) rule that broadened the meaning of "employer associations" to include small businesses and self-employed individuals. The Court held that the provisions defining "employer" to include associations of disparate employers and expanding membership in these associations to include working owners without employees were unlawful. The Court reasoned that, because the associations can be formed solely for the purposes of offering an AHP—with no other viable identity apart from offering an AHP, the rule violated the Affordable Care Act (ACA) and the Employee Retirement Income Security Act (ERISA).