The Labor Department Wants Gig Workers Buying Health Insurance Through Associations

If you are self employed and your health premium jumped this year, a rule now sitting at the White House could eventually give you another place to buy cover. Quartz, citing CNBC, reported that the US Labor Department has submitted a draft rule proposal that would expand access to health insurance through membership organisations, with potential implications for millions of gig workers and small businesses. The important caveat first, because it shapes everything else. This is a draft under review, its specific provisions have not been made public, and the last version of this idea did not survive a court challenge. At Metaintro, we cover benefit rules like this because for independent workers, health coverage is usually the single largest fixed cost of being your own employer.

What is an association health plan?

It is a health plan bought through a membership body rather than through an individual marketplace or a single employer. The logic is straightforward pooling. A trade association gathers many small members into one group, and the group buys cover on terms a sole trader could never negotiate alone.

The constraint is in the rules about who counts as an employer. Under existing law, association health plans can be offered only through associations that connect members within the same industry, and those members must themselves have employees. Read that twice if you are a freelancer, because it is the sentence that excludes you. If you work alone, you have no employees, so you are not an employer, so the association route is closed. The draft rule would address the definition of employer under federal benefits law to give associations broader ability to offer coverage to their members. That definitional change is the entire mechanism. Everything else follows from it. If you are weighing what employment status costs you in benefits, start with how being misclassified at work shrinks your paycheck covers the adjacent problem.

Why is this coming back now?

Because individual coverage has become sharply more expensive. Marketplace premiums for enrollees jumped an average of 58 percent this year following the expiration of enhanced premium subsidies at the end of 2025, after Congress declined to extend them. Data from KFF, the nonpartisan health policy research group, show insurers requesting a 15 percent median premium increase for 2027.

That is the backdrop against which the proposal is being read. Supporters argue association plans could offer lower premiums than marketplace plans to self employed workers who earn too much to qualify for subsidies, which is the specific group squeezed hardest by a subsidy expiry. The same pressure is visible from the employer side, where ACA premiums climb again for 2027 and the per employee cost employers carry keeps rising, and from the worker side, where real wage gains are being absorbed by health insurance.

How many workers could this affect?

The most concrete published figure is from the Bureau of Labor Statistics, which counted 11.9 million independent contractors in July 2023, 7.4 percent of total employment. That is the population the definitional change is pointed at, though the draft's actual scope is unknown until the text is published.

One trade body gives a sense of the demand. NAR, a trade group with a membership exceeding 1.4 million, supported the effort, and its executive vice president and chief advocacy officer said self employed real estate professionals deserve the same health coverage choices that employees and union members already have. About 14 percent of NAR's members are uninsured. That uninsured share inside a large professional association is the clearest illustration of the gap being described. These are licensed professionals with steady work who are nonetheless outside employer cover. If real estate is your field, the cost belongs alongside what the job actually involves day to day and the benefits of working as an agent, because it is the one an agent is expected to carry alone.

Why did the last version fail?

In court, on the same definitional question. The first attempt came in 2018, and a federal judge, ruling in response to a multistate lawsuit, held in 2019 that the Labor Department had impermissibly broadened what ERISA means by the word employer, striking down key portions of the rule. It was formally rescinded in 2024.

That history is why the current proposal is being treated cautiously by analysts rather than as a settled change. The director of the programme on patient and consumer protections at KFF described the department as going back to the drawing board on the definition of employer, which is what it did originally before parts were struck down, and said it is hard to guess what will be done to get around the court's concerns. In other words, the legal obstacle that stopped this last time has not gone anywhere, and the department has to solve it in the drafting.

The 2018 rule did two things worth knowing, because they indicate what a second attempt might contain. It brought self employed individuals within the ERISA definition of employer, making them eligible, and it opened plan sponsorship to associations formed around a common geographic area rather than a shared trade. That second change is the more expansive one, since it would allow a local chamber of commerce style body to sponsor a plan rather than only an industry guild.

What is the argument against it?

Adverse selection, and it is a serious objection rather than a procedural one. Experts noted that a wave of younger, healthier people leaving for association plans would concentrate sicker, costlier enrollees in the marketplace, putting upward pressure on premiums for everyone who stays.

That trade off is worth understanding clearly if you are the person deciding. An association plan may be cheaper for you specifically because the pool you join is healthier than the pool you left, not because the underlying care got cheaper. Whether that is a fair outcome is a policy question with reasonable people on both sides, and the answer will differ depending on which pool you personally end up in. What matters for your own planning is that it makes the comparison between two plans less like comparing two prices for the same product, and more like comparing two different bets about your own future health.

What does this mean for your career?

Four practical points, and the first is the most important.

Nothing has changed yet. The proposal is under review by the Office of Information and Regulatory Affairs, the specific provisions have not been made public, and the Labor Department did not respond to a request for comment. Do not restructure your working arrangements, drop existing cover or delay an enrollment decision on the strength of a draft rule. Rules at this stage can be altered substantially, withdrawn, or struck down later, as this exact idea already was once.

Join the association before you need the plan. If a version of this rule does take effect, eligibility will run through membership bodies, and the associations best placed to sponsor plans quickly will be established ones with scale, as the 1.4 million member example suggests. Membership in your trade or professional body is generally cheap relative to a health premium, and it carries other career value regardless of what happens here.

Know your own numbers before any comparison arrives. The group this is aimed at is self employed workers earning too much to qualify for subsidies, so the first thing to establish is which side of that line you are on. The gig worker tax guide sets out the income calculations that decide it, and the freelancer survival guide covers the wider cost base of working independently.

Price coverage into your rate now rather than later. Independent workers routinely set rates against a salaried benchmark without adding the cost of the benefits an employer used to provide. With marketplace premiums up 58 percent in a single year, that omission has become expensive. The scale of that trade off shows up in the workers who stay in jobs they dislike purely for the health insurance, because coverage is the reason that trap exists at all. Going the other way has its own reality check in gig workers logging more hours for less pay.

How does this fit the wider shift in who provides benefits?

It is part of a longer drift in which the link between a job and a benefits package keeps loosening. The population at the centre of this rule, the 11.9 million independent contractors counted in 2023, sits outside the system that most benefit design still assumes. So does a large share of the people doing platform work, and the direction of travel has been toward more of that arrangement rather than less. The same question surfaces whenever a major gig platform shuts down, and China's move to extend contract rights to platform workers is a very different regulatory answer to the same problem.

The employer side is under matching pressure. Firms are actively reviewing what they can afford to keep offering, which is why there are now three questions worth asking before cutting an employee benefit, and why some are competing on perks that cost less than health cover, such as paid vacation stipends. The insurance sector doing the underwriting is itself shedding roles, with financial sector job cuts reaching insurance carriers.

For an individual worker, the useful conclusion is that benefits are becoming something you assemble rather than something you receive. That is a real change in what career planning involves. It means the decision to go independent is no longer only about rate and autonomy, it is about whether you can source and afford the package an employer used to buy at scale. Anyone weighing that move should start with the career insurance moves worth making, and anyone whose own trade is insurance will find the hiring picture in the insurance agent resume guide. The share of workers who are self employed is itself a moving number, and it recently fell below a long standing threshold. For those entering the field this rule is aimed at, becoming a real estate agent starts with the licensing path.

Where does a rule like this actually sit right now?

At the review stage, which is the part worth understanding before reacting to any headline about it. A draft rule submitted to the White House goes to the Office of Information and Regulatory Affairs, and pending submissions appear on reginfo.gov before any text is public. Association health plans are handled by the Labor Department's Employee Benefits Security Administration, whose rulemaking and public comment record on the definition of employer sits on the EBSA docket, and whose proposed and final rules are published through the Federal Register.

That sequence matters because each stage takes months and any of them can end the process. Nothing changes for a self employed worker at submission. It changes at a final rule, and even then the coverage on offer depends on what an association actually assembles. Watching the docket is more useful than watching the commentary.

What should you watch for next?

Three signals, in order. First, publication of the actual text, since the provisions are not yet public and the scope of the employer redefinition is the whole story. Second, whether the drafting attempts to sidestep the 2019 ruling or to test it again, which the KFF assessment flags as the open question. Third, whether states move independently, since the last round was stopped by a multistate lawsuit and state insurance regulators have their own authority over what is sold to their residents.

For most independent workers the sensible posture is informed patience. This is worth tracking because the cost at stake is large and rising, and worth not acting on because the substance is genuinely undecided. The wider squeeze is already reaching the industry itself, with buyouts hitting health insurance workers and subsidy losses reaching hospital jobs, which shows how far the affordability problem now runs into employment.

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People Also Asked

Q: Can I buy an association health plan right now as a freelancer?

A: Generally no, not as a sole trader. Under existing law association health plans can be offered only through associations connecting members within the same industry, and those members must themselves have employees. The draft rule would change the definition of employer to widen that eligibility, but it is still under review at the Office of Information and Regulatory Affairs and its provisions have not been published.

Q: Would an association plan actually be cheaper than a marketplace plan?

A: Supporters argue it could be for self employed workers who earn too much to qualify for subsidies. The caution raised by experts is that part of any saving may come from pooling with younger and healthier members, which would concentrate sicker and costlier enrollees in the marketplace and push premiums up for those who remain. Until the rule text exists, no specific price comparison is possible.

Q: Why did the previous association health plan rule not survive?

A: A federal judge ruled in 2019, in response to a multistate lawsuit, that the Labor Department had impermissibly broadened what ERISA means by the word employer, and struck down key portions of the 2018 rule. It was formally rescinded in 2024. A health policy analyst at KFF has described the current effort as returning to that same definitional question without a clear route around the court's concerns.

Know your rights and your real costs before the rules change around you. Metaintro tracks the benefit, pay and classification decisions that quietly determine what independent work actually nets you. Create your free Metaintro profile to keep track of how policy shifts land on your role.