U.S. Department of Labor

DOL Finalizes Rule to Expand Association Health Plans

On June 19, 2018, the Department of Labor (DOL) released a final rule that gives small businesses more freedom to join together as a single group to purchase health insurance in the large group market or to self-insure. These benefit arrangements are called association health plans (AHPs).

By forming AHPs, small employers can avoid certain Affordable Care Act (ACA) reforms that apply to the small group market. According to the DOL, this will provide small employers with more affordable health insurance options.

However, in exchange for lower premiums, AHPs may cover fewer benefits. Most AHPs will not be subject to the ACA’s essential health benefits (EHB) reform, which requires small group plans to cover a core set of items and services, such as mental health care and maternity and newborn care.

ACTION STEPS

Small employers may want to consider banding together to form an AHP as a more affordable health insurance option. Employers should carefully review the AHP’s benefit design to make sure it is appropriate for their workforce. Because AHPs are regulated at the federal and state level, the availability of these plans will also depend on a state’s regulatory approach.

Background

On Oct. 12, 2017, President Donald Trump signed an executive order that directed the DOL to consider issuing regulations that would permit more employers to form AHPs as a way to expand access to more affordable health coverage. The DOL was specifically instructed to consider expanding the conditions that must be satisfied to form an AHP that is treated as a single plan under the Employee Retirement Income Security Act (ERISA).

Currently, the criteria that must be satisfied for a group of employers to sponsor a single ERISA plan are very narrow. As a result, most […]

By |June 21st, 2018|Compliance, Employee Benefits, Medical, U.S. Department of Labor|Comments Off on DOL Finalizes Rule to Expand Association Health Plans

EEOC’s Status Report in AARP v. EEOC Creates Uncertainty for Wellness Programs

In its March 30 status report to the U.S. District Court for the District of Columbia in American Association for Retired Persons (AARP) v. EEOC, the EEOC stated that “it does not currently have plans to issue a Notice of Proposed Rulemaking addressing incentives for participation in employee wellness programs by a particular date certain, but it also has not ruled out the possibility that it may issue such a Notice in the future.”

Employers continue to face uncertainty as to wellness program incentives subject to the ADA and GINA (i.e., those with medical exams or disability-related inquiries) as the EEOC awaits confirmation of Janet Dhillon as EEOC Chair and considers “a number of policy choices available.” In other words, the EEOC may wait until the Senate confirms outstanding nominations before re-engaging in the rulemaking process, leaving wellness programs open to challenge in 2019 by employees who feel that the incentives (or penalties) are so great that they render the program involuntary.

Background

As background, under the ADA, wellness programs that involve a disability-related inquiry or a medical examination must be “voluntary.” Similar requirements exist under GINA when there are requests for an employee’s family medical history (typically as part of a health risk assessment). For years, the EEOC had declined to provide specific guidance on the level of incentive that may be provided under the ADA, and their informal guidance suggested that any incentive could render a program “involuntary.” In 2016, after years of uncertainty on the issue, the agency released rules on wellness incentives that resemble, but do not mirror, the 30% limit established under U.S. Department of Labor (DOL) regulations applicable to health-contingent employer-sponsored wellness programs.   While the regulations appeared to be […]

By |April 17th, 2018|Employee Benefits, Employee Benefits Adviser, Employee Communications, Retired, U.S. Department of Labor|Comments Off on EEOC’s Status Report in AARP v. EEOC Creates Uncertainty for Wellness Programs