Business & Finance
Labor Department submits rule to expand access to association health plans
The proposed rule aims to broaden the definition of an employer, potentially offering lower-cost insurance options for self-employed workers and small businesses.
The short version
- The U.S. Labor Department has submitted a draft rule proposal to the White House to expand worker access to association health plans (AHPs).
- The proposal attempts to alter the definition of an employer under federal benefits law, which could allow small businesses and self-employed gig workers to obtain lower-cost health coverage.
- This effort marks the second attempt by the Trump administration to expand AHPs after a 2018 regulation was struck down by a federal judge in 2019.
- The full text of the draft rule remains undisclosed, leaving key details uncertain regarding how the administration will address previous legal challenges or mitigate potential cost increases in the ACA marketplace.
Key facts
- The Labor Department submitted a draft rule to the Office of Information and Regulatory Affairs to expand association health plans by redefining 'employer' under federal benefits law.[CNBC]
- A previous 2018 attempt by the Trump administration to expand AHPs to self-employed workers and unrelated trade associations was vacated by a federal judge in 2019 and formally rescinded by the Biden administration in 2024.[CNBC]
- Enhanced Affordable Care Act premium subsidies expired at the end of 2025, contributing to an average 58% increase in premium payments for enrollees this year.[CNBC]
- Health insurance costs are projected to rise next year by 9.5% for large employers and 14% for small businesses, while ACA marketplace insurers are seeking a median premium increase of 15% in 2027.[CNBC]
- Association health plans structured as large-group plans are exempt from certain ACA rules, such as individual age-rating restrictions and mandatory essential health benefit inclusions.[CNBC]
What remains uncertain
- The exact provisions of the draft rule have not been released publicly, and the Labor Department has not provided further details.[CNBC]
- It is unclear how the new proposal will overcome the legal issues that caused federal courts to invalidate the 2018 rule under ERISA.[CNBC]
- Health policy experts caution that if healthier workers migrate to AHPs, it could leave a smaller, higher-risk pool in the ACA marketplace, potentially driving up premiums for remaining policyholders.[CNBC]