Association Health Plans

An association health plan (AHP) is a type of ERISA-covered group health plan sponsored by a group or association of employers (instead of a single employer) to provide health coverage to employees of the AHP’s employer members. Under ERISA, an AHP is both a group health plan and a multiple employer welfare arrangement (MEWA).

As ERISA-covered plans, AHPs are subject to reporting and disclosure requirements, claims procedure rules and fiduciary rules. In addition, AHPs must comply with other federal employee benefit laws, including COBRA, HIPAA and the Affordable Care Act (ACA).

When an AHP is treated as a single ERISA plan, all employees covered by the plan are considered when determining the insurance market rules (that, is small group or large group) that apply to the plan. Also, the plan itself (and not the participating employers) is responsible for ERISA compliance when the AHP is treated as a single plan. The Department of Labor (DOL)has established two different ways—a narrow pathway and a more expansive pathway—for an AHP to qualify as a single ERISA plan. However, due to a court ruling, only the narrow pathway is currently available to employer groups and associations that establish AHPs.