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DOL Expands Association Health Plans While Trump Proposes Agency Restructure

This week, the U.S. Department of Labor (DOL) made headlines with a final rule affecting small businesses and other entities and a merger proposed by the Trump Administration that could change the structure of the agency as we know it.

Expanding Access to Association Health Plans

On June 19, the DOL issued a final rule enabling small businesses, including self-employed individuals, to join in forming Association Health Plans (AHPs) for purposes of securing group health insurance rates.  The new rule establishes a “commonality of interest” test for entities treated as employers under the Employee Retirement Income Security Act (ERISA) that is more flexible than the DOL’s previous test.  The rule is set to go into effect on August 20, 2018.

The final rule is a follow-up to President Trump’s Executive Order 13813 of October 12, 2017, which described the Administration’s mission of improving AHPs, short-term, limited duration insurance (STLDI), and health reimbursement arrangements (HRAs).  The rule is touted as a solution to the increased costs (including premiums and deductibles) faced by small businesses and their employees as a result of providing coverage under the Affordable Care Act (ACA).  The DOL explains that the AHP rule “expand[s] access to affordable health coverage options for America’s small businesses and their employees[,]” enabling them to “gain many of the regulatory advantages enjoyed by large employers.”

Opponents of the rule argue, among other things, that sicker individuals in need of comprehensive health insurance plans will face increased costs as a result of the expanded AHPs.

Proposing to Reorganize

On June 21, President Trump published the Administration’s federal government reorganization proposal to consolidate several federal agencies, including key departments that enforce federal labor and employment laws and regulations.  Among other things, the proposal calls for the merger of the DOL with the U.S. Department of Education (ED) into a new federal agency to be called the Department of Education and the Workforce (DEW).  The merger would affect all departments at the DOL, including the Wage and Hour Division and Occupational Safety and Health Administration (OSHA).

Supporters and critics of the proposal disagree over whether the ED and DOL have enough in common to render their merger a good idea or one that would promote government efficiency.  In any event, the proposal needs congressional approval before a restructure would take place.

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