Association Health Plans – A chance to make a difference! The Department of Labor is asking for input. A positive step.

Association Health Plans (AHP), which we’ve discussed here before, may soon be in the news again. The DOL has released some initial guidelines on which it is requesting comments. As you may recall, your humble author has opined that AHPs present an opportunity to lower the cost of premiums as well as healthcare costs while increasing the number of options available for small employers and their employees.

You may not hear much about AHPs in the liberal Press outlets and maybe not on regular TV at all because it is a complex subject but also because liberals fear it furthers the dismantling of the ACA.

In fact the only outlets which may cover the ongoing discussion will be consumer oriented free market websites and blogs. Cable business shows will provide short segments but for detail we’ll need to stay tuned to trust-worthy entities such as SPBA (Society of Professional Benefit Advisors) or directly from the DOL or other government sites.

But, we’ll watch and discuss the progress of these regulations here and look for the best ideas being pushed forward. Today will be a view from 10,000 feet but we will fly lower in the weeks to come.

The guidelines will expand the existing DOL ERISA regs to incorporate the objective of allowing small employers to band together to create a larger unit which can be treated as a single employer.
In other words, by banding together, small employers with 2-50 EEs, can shop for and consider health insurance plans just like large employers. It increases their buying power. Wouldn’t you, as an individual, like to have the purchasing power of an employer the size Walmart, Microsoft, Boeing, or Amazon. I would.

Let’s start with some a couple of the DOL guidelines released:

  • Broadening the criteria under ERISA section 3(5) for determining when employers may join together in an employer group or association that is treated as the “employer” sponsor of a single multiple-employer “employee welfare benefit plan” and “group health plan” as those terms are defined in Title I of ERISA.
    (I know, a bit technical)
  • Redefines the term “group or association of employers” under ERISA more broadly, in a way that would allow more freedom for businesses to join together in organizations that could offer group health coverage regulated under the ACA as large group coverage.
  • Treating the AHP as the “employer sponsor” of a single plan. The regulation would facilitate the adoption and administration of such arrangements.

I’ll stop right there with the technical mumble jumble because the last point a key point.

By allowing small employers to be treated a like a large employer, because the small employer is member of an AHP, will increase the purchasing power along with the number of options available to the small employer.

There is much more to review such as:

  • Will individual employers within an AHP be able to purchase stop-loss coverage?
  • How will EHBs be addressed?
  • How does an AHP sign up its initial member employers?
  • Can a small employer’s initial premiums be set for each single employer or must premiums be the same for all member employers?
  • Will AHPs overcome the stop-loss killing regulations set in force in California?

So, there is much to review. I look forward to your input as the AHP guidelines are constructed.

It is important to remember that while the AHP approach provides a huge potential to reduce cost and improve access, we can not go away from guarantee access and providing responsible provisions for participant’s pre-existing conditions.

We’re all in this together so let me know what you think.
Until next week.

Mark Reynolds, RHU
559-250-2000
mark@reynolds.wtf

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