Small businesses would have greater flexibility to join together through association health plans to avoid some Affordable Care Act coverage requirements under a final rule issued by the Trump administration Tuesday.

President Donald Trump signed an executive order last year directing the U.S. Department of Labor to find ways to expand the use of association health plans as a way of circumventing some ACA mandates. The order came after Republicans in Congress failed to repeal the Obama-era health care law, dealing a major policy defeat to the administration.

The final rule released by the Labor Department allows small businesses and sole proprietors to use association health plans to buy employee coverage to "gain many of the regulatory advantages enjoyed by large employers," according to a statement by the department. Among other things, the plans would not have to provide coverage for the ACA's 10 Essential Health Benefits, including pregnancy, emergency services and prescription drugs.

Participants in the plans also could purchase insurance across state lines. However, the administration said the rule "does not diminish state oversight" of health insurance and prevents discrimination against people with pre-existing conditions.

Many business groups favor the expansion, including the U.S. Chamber of Commerce, National Association of Manufacturers, ASAE and International Franchise Association.

"Today is a great day for America's franchise job creators and their employees in the fight for high quality, less expensive health coverage," IFA CEO Robert Cresanti said.

However, groups representing insurers, health care professionals and state insurance regulators have criticized the proposal. America's Health Insurance Plans is among the critics, but in a statement the group said the final rule contained important provisions, such as coverage for pre-existing conditions.

"However, we remain concerned that broadly expanding the use of AHPs may lead to higher premiums for consumers who depend on the individual or small group market for their coverage," the association said.

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