For years, one of the biggest frustrations in American health insurance has been relatively easy to identify and incredibly difficult to solve.

If you work for a large employer, you generally have access to group health insurance.

If you own a small business, work for yourself or participate in the gig economy, things can get considerably more complicated.

The Trump administration is now taking another run at changing that.

The Department of Labor is preparing a proposed rule that could expand access to Association Health Plans, commonly known as AHPs. The proposal would change the criteria under which groups or associations can be treated as an "employer" under federal law and sponsor a group health plan for their members.

The details haven't been released yet. The proposal was submitted to the White House Office of Management and Budget for review in August, and the federal regulatory agenda currently anticipates a proposed rule later this year.

But the direction is clear.

The administration wants to make it easier for certain small businesses and potentially self-employed Americans to band together when purchasing health insurance.

If the eventual rule survives the regulatory and legal process, it could create something the health insurance market badly needs:

another option.

And perhaps more importantly, it could begin changing the way Americans think about buying health insurance outside of the traditional employer system.

What Is an Association Health Plan?

The basic idea behind an Association Health Plan isn't particularly complicated.

Large companies generally have advantages when purchasing health insurance.

They have more employees.

They can spread risk across a larger group.

They have greater negotiating power.

And they have the administrative resources necessary to manage a health plan.

A business with eight employees doesn't have those same advantages.

Neither does a self-employed real estate agent, independent contractor, consultant or small business owner.

An Association Health Plan attempts to change that equation by allowing multiple employers connected through an association to participate in a larger group health plan.

Think of it as strength in numbers.

Instead of 50 small businesses independently purchasing coverage, an association representing thousands of businesses could potentially negotiate and structure coverage across a much larger population.

The concept isn't new.

Association Health Plans have existed for decades under certain circumstances. The controversy is largely about who should be allowed to form them and who should be allowed to participate.

That's exactly what the Trump administration is revisiting.

Trump Tried This Before

This isn't President Donald Trump's first attempt at expanding Association Health Plans.

During his first administration, the Department of Labor finalized a rule in 2018 that substantially expanded the circumstances under which businesses could join together to establish an AHP.

Among other things, that rule opened the door for associations based on geography and allowed certain self-employed individuals without employees—often called "working owners"—to participate.

That last category was particularly significant.

There are millions of Americans who operate businesses without traditional employees.

Real estate agents.

Consultants.

Independent insurance agents.

Contractors.

Freelancers.

Owner-operators.

And an expanding universe of professionals who don't fit neatly into the traditional employer-employee system.

For many of them, buying individual health insurance has effectively meant going to the Affordable Care Act marketplace or finding another form of individual coverage.

Trump's 2018 rule attempted to give some of those people another door.

But the rule ran into legal trouble.

A federal court invalidated key portions in 2019, finding that the Department of Labor had stretched the definition of "employer" too far under the Employee Retirement Income Security Act, better known as ERISA.

The Biden administration ultimately rescinded the rule in 2024.

Now the Trump administration is returning to the issue.

Why This Matters More in 2026 Than It Did in 2018

The timing is important.

Health insurance is expensive.

And it is getting more expensive.

Insurers participating in the Affordable Care Act individual marketplace have proposed a median premium increase of approximately 15% for 2027, according to an analysis cited in reporting on the new Association Health Plan proposal.

Small businesses are also confronting substantial increases.

Meanwhile, the enhanced ACA premium subsidies that made marketplace coverage significantly less expensive for millions of consumers expired at the end of 2025.

That has changed the economics of individual health insurance.

Someone receiving a substantial subsidy may find ACA coverage affordable.

Someone earning too much to receive meaningful assistance can have a very different experience.

A self-employed couple in their 50s or early 60s can potentially face an enormous monthly premium before they ever visit a doctor.

This is where Association Health Plans become interesting.

The Trump administration's approach appears to be based on a relatively simple idea:

Instead of trying to make every American fit into the same individual insurance structure, create more ways for people to obtain group coverage.

That's a direction worth exploring.

Small Businesses Have Always Been at a Disadvantage

One of the strange realities of American health insurance is that the price and availability of coverage can depend heavily on how you work.

Two people can earn similar incomes, live in the same county and have similar healthcare needs while accessing health insurance through completely different systems.

One works for a corporation with 20,000 employees.

The other owns a small plumbing company with six employees.

The corporation can negotiate and spread risk across an enormous population.

The plumbing company cannot.

Association Health Plans attempt to reduce that disadvantage.

If thousands of plumbers, electricians, insurance agents, farmers, Realtors or other professionals can join together through legitimate organizations, they begin to look more like a large group.

That doesn't magically make healthcare inexpensive.

Nothing does.

But larger pools can potentially create administrative efficiencies, greater bargaining leverage and more flexibility in how insurance products are designed.

The Department of Labor has already demonstrated interest in this model.

Earlier this year, the department issued an advisory opinion involving the Idaho Farm Bureau Federation, determining that a proposed health plan for employees of its approximately 10,770 members could qualify as an ERISA-covered employee welfare benefit plan.

The department explicitly described the action as part of an effort to expand access to affordable coverage for small businesses.

That could provide a preview of where the administration wants to go nationally.

The Biggest Opportunity May Be the Self-Employed

The most consequential question hasn't been answered yet:

Will the new rule allow self-employed individuals without employees to participate?

We don't know.

The proposed regulation isn't public.

But supporters are pushing hard for it.

The National Association of Realtors, for example, has advocated for expanding Association Health Plan access to self-employed real estate professionals.

The reason isn't difficult to understand.

There were approximately 11.9 million independent contractors in the United States in 2023, according to Bureau of Labor Statistics data cited in reporting on the proposal.

That is a massive potential insurance market.

And those workers increasingly represent a gap in America's employer-sponsored insurance system.

If you work independently, you don't have an HR department selecting your health insurance.

There is no employer paying a large portion of your premium.

You're on your own.

Giving legitimate professional associations the ability to organize health coverage for those individuals could fundamentally alter the individual health insurance landscape.

More Competition Could Be Good for the ACA Market Too

At first glance, Association Health Plans might appear to be an attack on the Affordable Care Act.

They don't necessarily have to be.

The ACA marketplace can continue serving consumers for whom ACA coverage makes sense.

Association Health Plans could serve another portion of the population.

Traditional employer coverage can continue serving another.

Other private options can fill additional gaps.

Competition doesn't require destroying one system to build another.

In fact, one of the persistent problems in American healthcare is the tendency to treat health insurance as though there must be one universal solution.

There probably isn't.

A 28-year-old self-employed contractor may need something different from a 61-year-old diabetic.

A family of five may have different priorities from a single freelancer.

A company with 12 employees has different insurance needs from a company with 12,000.

Expanding Association Health Plans could move the market toward recognizing those differences.

And if insurers suddenly have to compete for association business representing thousands of potential members, that competition could encourage innovation in plan design, networks and pricing.

There Are Legitimate Concerns

There is another side to this debate, and it shouldn't be ignored.

Association Health Plans have historically raised concerns about consumer protection, financial solvency and adverse selection.

Critics also worry that expanding AHPs could draw healthier consumers away from the ACA marketplace.

Insurance works by pooling risk.

If younger and healthier self-employed individuals leave the ACA market for less expensive Association Health Plans while older and less healthy consumers remain, premiums in the ACA pool could rise further.

There are also questions about benefits.

Depending on how an AHP is structured and regulated, it may not necessarily be subject to every requirement applicable to an ACA individual or small-group plan.

That can create flexibility.

It can also create gaps.

A cheaper health plan isn't necessarily a better health plan if the consumer discovers after becoming sick that an important service isn't covered.

Those are real concerns.

The answer shouldn't necessarily be to prohibit alternatives.

It should be to build alternatives with clear disclosures, meaningful solvency requirements and enough consumer protection that people understand what they're buying.

If the Trump administration can accomplish that, the second attempt at expanding AHPs could be considerably stronger than the first.

This Could Create a New Role for Health Insurance Agents

There is another group that could be affected by an expansion of Association Health Plans:

Insurance agents and brokers.

For years, the individual health insurance market has become increasingly centralized around the ACA marketplace.

That system serves an important purpose, but it has also changed the agent's role.

If Association Health Plans expand, agents could once again find themselves comparing substantially different forms of coverage.

ACA marketplace plans.

Small-group plans.

Association Health Plans.

Employer-sponsored options.

And potentially other private alternatives.

That makes the market more complicated.

But complexity creates a need for advice.

An agent's job shouldn't simply be finding the cheapest premium.

It should be explaining the tradeoffs.

What does the plan cover?

What doesn't it cover?

How large is the network?

Are prescriptions covered?

What is the deductible?

What is the maximum financial exposure?

Is an ACA subsidy available?

Does the consumer qualify for association coverage?

Agents are already discussing what expanded Association Health Plans could mean across industry communities and insurance forums. Much of the interest is understandably centered on the self-employed market because that is where the change could create an entirely new group of prospective clients.

The opportunity could become substantial.

Imagine Associations Actually Competing for Members

There is another potential consequence that hasn't received enough attention.

Health insurance could become a reason to join professional organizations.

Imagine an independent insurance agent choosing between several industry associations.

One offers education.

Another offers networking.

Another offers a high-quality group health insurance program negotiated for its members.

That health plan suddenly becomes a meaningful membership benefit.

The same thing could happen among Realtors, contractors, farmers, truck drivers and other independent professionals.

Associations would have an incentive to negotiate better coverage because better benefits could attract more members.

Insurance carriers would have an incentive to compete for those associations because each organization could represent thousands—or potentially hundreds of thousands—of insured lives.

That begins to look more like a functioning marketplace.

It Won't Solve America's Healthcare Cost Problem

We should also be realistic.

Association Health Plans aren't going to solve the fundamental problem with American healthcare.

The underlying cost of healthcare is still rising.

Hospitals are expensive.

Prescription drugs are expensive.

Specialty medications are becoming extraordinarily expensive.

Medical labor is expensive.

Technology is expensive.

Insurance is ultimately financing those costs.

Changing how people purchase insurance doesn't make the underlying healthcare bill disappear.

But there is a difference between solving every healthcare problem and improving the insurance market.

America doesn't need to wait for a perfect healthcare solution before trying smaller reforms.

If millions of small business owners and independent workers can obtain better coverage at a more competitive price, that's meaningful progress.

The Second Attempt Could Be More Important Than the First

Trump's first Association Health Plan expansion was ambitious.

Perhaps too ambitious from a legal standpoint.

The courts made that clear.

But losing the first round doesn't necessarily mean the underlying idea was wrong.

It means the administration has to design a rule that works within ERISA and addresses the legal weaknesses identified the first time.

That appears to be what the Department of Labor is attempting now.

The final details will matter enormously.

Who qualifies?

What constitutes a legitimate association?

Can self-employed individuals participate?

How will plans be regulated?

What consumer protections will apply?

How will states interact with the federal framework?

Until the proposed rule is released, those questions remain unanswered.

But the policy direction itself is significant.

For decades, large employers have enjoyed advantages in the health insurance market that small businesses and self-employed Americans simply haven't had.

President Trump's approach is essentially asking:

Why shouldn't they be allowed to join together and compete like a large employer too?

That's a reasonable question.

And if the administration gets the details right, the answer could reshape part of the health insurance market.

More associations could enter the market.

More carriers could compete for their business.

Small employers could gain greater purchasing power.

Independent workers could gain alternatives to the individual marketplace.

And insurance agents could have more options to offer their clients.

None of that guarantees lower healthcare costs.

But it does something the American health insurance system could use more of:

It creates another choice.

And in a market where premiums continue to rise and millions of self-employed Americans have relatively few places to turn, more competition and more choice may be a very good place to start.