The U.S. Department of Labor (DOL) has issued new guidance narrowing when a group of unrelated employers can join together and form an association health plan (“AHP”)—a plan that is treated as a single employer plan under ERISA. The new guidance narrows the circumstances under which an AHP can be considered an employer-sponsored plan under ERISA. This ruling may also foretell changes to the rules governing multiple employer retirement plans (MEPs).

The U.S. Department of Labor has taken legal action against a multiple employer welfare association (MEWA) plan, alleging the MEWA organizers fraudulently pocketed tens of millions of dollars, while leaving claims unpaid. There are some important lessons to be learned as the Trump Administration’s seeks to increase the use of similarly structured Association Health Plans (AHPs).