June 22, 2018
The Labor Department’s final Association Health Plan (AHP) rule, designed to expand employer-provided health care benefits, states that employers' participation in such plans does not “give rise to joint employer status under any federal or State law, rule, or regulation.”
HR Policy raised concerns that, due to the “ambiguity and lack of uniformity” in various circuit court tests for joint employer status, the DOL “should include language that ensures all employers are not at risk of joint employment liability based on participating in an AHP.”
The new rule is primarily targeted at small employers:
Outlook: If the final regulation survives a legal challenge that has been filed by the Massachusetts and New York attorneys general, the rules will be implemented in stages from September 1, 2018 to April 1, 2019. However, some “blue” states that are concerned about what impact AHPs may have on their individual markets have indicated they may place limitations on the plans.
Significance of joint employer language: Though the rule will primarily benefit small employers, the DOL's clarification of the joint employer liability issue is a positive sign of a new direction on this issue. The previous administration had adopted a far more expansive approach to joint employer liability, which affected employers of all sizes.