In 2018, the U.S. Department of Labor issued a final rule to expand association health plans (AHP) to include working owners and sole proprietors/independent contractors (like real estate professionals). However, a federal court struck down parts of the AHP ruling in March 2019, including key provisions allowing sole proprietors to be eligible for this type of insurance coverage.
Due to expressed interest by members and local associations in a Texas REALTORS® association health plan, initial research began in May on the feasibility and viability of creating such a member insurance offering . Texas REALTORS® staff asked local associations to support a statewide offering, as such support would be needed to maximize the value of creating an association health plan for REALTORS® and W-2 staff of real estate brokerages.
Staff and leadership from Texas REALTORS® met with representatives from the HUB International, a full-service global insurance company that has worked in administering association health plans. This firm has technology-based solutions for gathering member questionnaire and census data and submits an insurance request for proposal to insurance carrier underwriters to determine plan viability and costs. This entity could ultimately be the plan administrator and be responsible for marketing, open enrollment processes, and premium collection and administration.
On June 3, 2019, the association received confirmation from our key representatives with the HUB group that the U.S. Department of Labor (DOL) has advised that due to the current ruling, Texas REALTORS® is unable to move forward with the formation of an association health plan as the federal court has vacated provisions that would have allowed individuals, sole proprietors (independent contractors), and W-2 employees of real estate brokerages expanded access to affordable, high-quality healthcare options. Regardless of state legislation or a certificate of authority from the Texas Department of Insurance, the DOL will consider it a violation of ERISA policy and fines of up to $10,000 per day can be levied for this type of violation.
The next step for the appeal of this decision rests with the D.C. Court of Appeals. The court will hear oral arguments sometime between the end of July and September and issue a decision one to two months after that. Only then will the options be known regarding the possible creation of an association health plan for members.
Texas REALTORS® will pass along further updates.