By Pension and Benefits Editorial Staff
The Employee Benefits Security Administration (EBSA) has issued frequently asked questions to address issues that may arise in light of the federal district court’s decision invalidating the final rule on association health plans (AHPs). In the FAQs, the EBSA notes that participants in AHPs have a right to benefits as provided by the plan or policy, and that health insurance issuers must keep their promises in accordance with the policies in place and pay valid claims. However, AHPs may have to modify their structure or operations going forward, and EBSA recommends that participants contact their AHP plan administrator directly about changes that the AHP may make in the future.
Background. At the end of March 2019, a federal court in the District of Columbia invalidated the DOL’s final rule on AHPs, saying that broadening the meaning of “employer associations” to include small businesses (with or without employees) and self-employed individuals was only done to avoid the Patient Protection and Affordable Care Act’s (ACA) health care market requirements. The court wrote, “DOL unreasonably expands the definition of ‘employers’ to include groups without any real commonality of interest and to bring working owners without employees within ERISA’s scope despite Congress’s clear intent that ERISA cover benefits arising out of employment relationships. Accordingly, these provisions are unlawful and must be set aside.”
EBSA’s position. In the FAQs, the EBSA noted that it disagrees with the district court’s ruling. The EBSA is considering appealing the ruling and possibly requesting that the district court stay its decision pending an appeal.
In addition, the FAQs direct plan participants to contact the EBSA at (866) 444-3272 to request assistance from a benefits advisor, and will provide additional resources to AHP plan administrators as they review and make determinations about their operations related to the district court’s decision.
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