Medical coverage for employees is often a stressful decision for small and family-owned businesses. Providing competitive benefits to employees can help attract and retain good employees. But the cost of employer-paid medical care can make it difficult for family-owned businesses to provide this benefit to their employees. Family-owned businesses have the option of participating in Association Health Plans (AHPs), which allow small employers to band together to have the pricing power and more flexible regulations that apply to large employers. In 2018, the U.S. Dept of Labor released new regulations that made it easier for businesses to create an AHP – it could be formed with the primary purpose of providing health insurance, although it must also have some other “substantial business purpose.”
On March 28, 2019, the federal court in D.C. struck down the regulations, stating they are based on “unreasonable interpretation” of ERISA. The DOL has appealed the decision. For family-owned businesses who were planning on expanded AHPs to provide medical coverage to their employees, you will need to put your plans on hold. For Washington-state businesses, you may still have some options under the AHPs approved under the old DOL guidance. Please read here for more information regarding what the court ruling means and next steps for your business.