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How some workers are able to access health insurance — and how much they pay for it — could be headed for a change.
The U.S. Labor Department is planning to propose a rule that would expand worker access to health insurance plans through certain membership organizations, according to a federal regulatory database.
The agency has submitted a draft rule proposal to the White House for review that would address the definition of "employer" under a federal benefits law to broaden associations' ability to offer coverage to their members.
Depending on the specifics of the proposal — which isn't public yet — it could help offer lower-cost insurance for millions of self-employed workers like those in the gig economy or for small businesses.
Costs for consumers in the Affordable Care Act marketplace have soared amid expiring ACA premium subsidies, and insurance affordability poses a political threat to Republicans during upcoming midterm elections.
The proposal, under review by the Office of Information and Regulatory Affairs, marks the second attempt by the Labor Department under President Donald Trump to expand eligibility for so-called association health plans, or AHPs.
The first attempt came in 2018, during Trump's first term in office. A federal judge vacated key provisions of that proposal in 2019 and the rule was formally rescinded by the Biden administration in 2024.
"They're going back to the drawing board on the definition of employer, which is what they did originally, but parts of it were struck down," said Kaye Pestaina, director of the program on patient and consumer protection at KFF, a nonpartisan health policy research group. "It's hard to guess what they'll do to get around the court's concerns."
The Labor Department didn't respond to a request for more information about the proposal.
Supporters want AHP access for the self-employed
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The cost of health insurance continues to rise.
Large employers will see their costs increase by 9.5% next year, according to an estimate from Aon, a benefits consulting firm and insurance brokerage.
Companies typically pass on at least some of those increases to workers, either through higher premium contributions or plan-design changes, such as larger deductibles or copays.
The typical small business faces premium increases of 14% next year, based on a preliminary analysis by KFF. Insurers that offer coverage to consumers through the ACA marketplace are seeking a median premium increase of 15% in 2027, according to KFF.
For some supporters of expanding AHPs, doing so in a way that lets self-employed individuals enroll is key — and is what the 2018 rule allowed.
The National Association of Realtors, which has more than 1.4 million members, "has long supported expanding access to [AHPs] because self-employed real estate professionals deserve the same health coverage choices that employees and union members already have," said Shannon McGahn, executive vice president and chief advocacy officer for NAR.
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Under current law — which is the same as pre-2018 — AHPs generally can only be offered through associations whose members are involved in the same industry and have employees of their own. However, many trade associations include sole proprietors who don't qualify for an AHP, and some organizations have members in a range of industries.
The 2018 rule changed that by extending the definition of "employer" under the Employee Retirement Income Security Act, or ERISA, to self-employed workers so they would be eligible for an AHP.
It also allowed associations to qualify for plan sponsorship based solely on members' shared geography even if they were in unrelated industries, among other provisions.
However, in response to a lawsuit from 11 states challenging the rule, a federal judge ruled that the Labor Department had stretched the meaning of "employer" under ERISA. The court also ruled against the expanded qualifications for associations to offer an AHP.
It's uncertain whether the upcoming proposal will again try to reach the self-employed through AHPs.
The cost of current coverage for solo operators
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There were 11.9 million independent contractors in 2023, according to the latest data published by the Bureau of Labor Statistics.
Unless those solo operators have coverage elsewhere — such as through a spouse's employer — they may buy a policy through the ACA marketplace. Those plans must cover essential health benefits, such as prescription drugs and mental health coverage.
Enhanced subsidies that lowered ACA premiums for a broader swath of enrollees expired at the end of 2025, after the Trump administration and Republican majority in Congress rebuffed Democrats' efforts to extend them. They were first enacted in 2021 during the Biden administration.
Millions of people are expected to drop their coverage this year following the expiration. Premium payments for enrollees have increased by an average of 58% this year, according to a May analysis by KFF.
However, some enrollees still can qualify for subsidies — also known as premium tax credits — if their household's modified adjusted gross income doesn't exceed 400% of the federal poverty level.
While ACA coverage works for many members, others face double-digit premium increases and high out-of-pocket costs.
Shannon McGahn
executive vice president and chief advocacy officer for the National Association of Realtors
For example, a single individual with an income of $62,600 would be at the 400% threshold this year, according to KFF.
That income limit is a cliff — earning a dollar over the limit generally means paying the full, unsubsidized premium.
Through the marketplace, the average unsubsidized premium for a benchmark silver plan for a 40-year-old consumer is $625 per month, according to KFF. Individuals who qualify for subsidies pay less.
"While ACA coverage works for many members, others face double-digit premium increases and high out-of-pocket costs," McGahn said. About 14% of the NAR's members are uninsured, she said.
AHPs could come with lower premiums for some people
There's a chance that allowing broader access to AHPs could mean enrollees pay lower premiums than they would with individual coverage, such as via the ACA marketplace, experts said.
This is because when an association health plan is treated as a large-group plan, it "has to follow some of the same rules that apply to individual coverage, but not all of the same ones," said Justin Giovannelli, an associate research professor and project director at Georgetown University's Center on Health Insurance Reforms.
For instance, it doesn't have to follow the individual and small-group age-rating rule — which says a plan's premium for a 64-year-old can be no more than three times the rate for a 21-year-old for the same coverage.
In other words, an AHP that is treated as a large-group plan — because it has enough employees across its member businesses to qualify as such — could theoretically offer lower premiums to young enrollees than are currently available through the ACA marketplace.
The federal government considers a large-group plan one with at least 51 employees enrolled, although some states may require a higher minimum.
Additionally, as a large-group plan, an AHP could contain costs by either excluding or limiting certain coverage areas that are required in small-group and individual coverage under the ACA.
"The thinking is that most of those self-employed business owners aren't eligible for premium tax credits, and that's why they pay more, and that's why this option for AHPs might be better for them if they are allowed to participate," said KFF's Pestaina.
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At the same time, however, if mostly young, healthy workers shift to an AHP because it's less expensive, it could mean a smaller, unhealthier pool of enrollees in the ACA marketplace — which would translate into higher premiums for the remaining group of people, experts said.
If more workers could enroll in an AHP, "they might be able to purchase cheaper coverage, but then there's the implication for everyone else who's left in the marketplace," Pestaina said.
