The Labor Department has submitted a draft rule proposal to the White House that would broaden associations’ ability to offer health insurance coverage to their members by modifying the definition of “employer” under federal benefits law. The initiative aims to expand access to association health plans, or AHPs, which could provide lower-cost insurance options for self-employed workers, gig economy participants, and small business owners.
This marks the second attempt by the Labor Department to expand AHP eligibility under President Donald Trump. A previous effort in 2018 faced legal challenges, with a federal judge vacating key provisions in 2019, and the rule was formally rescinded by the Biden administration in 2024. The earlier proposal had extended the definition of “employer” to include self-employed workers and allowed associations to qualify for plan sponsorship based on shared geography regardless of industry. Legal experts note uncertainty about whether the new proposal will attempt similar provisions given the prior court rulings.
The proposal comes amid significant challenges in the health insurance landscape. Premium costs continue rising substantially, with large employers facing projected increases of 9.5% next year and small businesses seeing increases around 14%. In the ACA marketplace, insurers are seeking median premium increases of 15% for 2027. The situation intensified after enhanced ACA subsidies expired at the end of 2025, resulting in average premium increases of 58% for some enrollees. Approximately 11.9 million independent contractors may lack adequate coverage options, and some industry groups report that roughly 14% of their members remain uninsured.
Proponents of AHP expansion, including organizations like the National Association of Realtors, argue that self-employed professionals deserve comparable coverage options to employees and union members. Under current law, AHPs generally require associations to have members in the same industry who maintain their own employees. Expanding AHP access could potentially offer lower premiums than individual marketplace coverage, though the specifics remain unclear pending the formal proposal’s release.
Article Attribution | Read More at Article Source
Article summary produced by Claude AI