A Look at Association Health Plans in 2018


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Many small business owners are satisfied with the recent outcome of a new rule approved by the Trump Administration that called for an expansion of association health plans. Not only do these association health plans aim to meet the unique needs of small businesses like restaurants, health clubs, real estate agencies, and plumbing companies, they can also save money. When President Trump announced the policy on June 19, he stated it would “result in very low prices, much more choice, much more freedom, including in many cases new opportunities to purchase health insurance.” Learn more about association health plans and how they are quickly growing in 2018.

What Are Association Health Plans?

Association health plans, or AHPs for short, were designed to allow self-employed individuals and small businesses to come together and purchase health coverage as part of an association. There are already some established AHPs available today and these options will remain in place even after the new policy takes effect. However, the Trump Administration will be encouraging additional plans to enter the marketplace, thus giving small businesses and self-employed individuals the opportunity to get the health coverage they need at a more affordable price.

Association health plans are ran under the rule of the Department of Labor. When small businesses and self-employed individuals band together, they are able to gain access to the types of coverage ordinarily only available to larger employers. This results in fewer expenses and a more customized health plan for workers. The new rule aims to gather more associations and employer groups to form AHPs based on their unique industry or geography. Also for the very first time, business owners and their families (including sole-proprietors), will have the opportunity to access quality health coverage affordably.

Prior to this new rule, AHPs were required to possess association members that shared an economic or other purpose beyond the need for health insurance. Under the new policy, members have the option to join an association for the main purpose of gaining adequate healthcare coverage. The new plans are set to begin rolling out in September, and will carry many of the same protections added by the ADA, such as requiring plans to cover many types of preventive care without charging patients anything out-of-pocket. These new plans will also continue to allow members to maintain their children on their health plan until they reach the age of 26.

What are the Benefits of Association Health Plans?

small business owner calculating the coverage costs under association health plansUp until recently, only specific groups could create and join association health plans. In 2018, nearly any group of people has this right. These plans differ than those released by Obamacare as there are no “metal levels” that separate healthcare into different plans based on cost. Instead, AHPs act as an alternative source of mainstream healthcare and provide at least minimum essential coverage. With the roll out of the new rule, small business owners are looking at a range of benefits available to them.

Greater price flexibility is one of the most attractive benefits of association health plans. AHPs will have the chance to set different monthly prices, or premiums, based on member characteristics such as gender, age, and lifestyle factors. Although the Affordable Care Act (ACA) barred most health plans from using such characteristics to determine insurance premiums, AHPs will return this flexibility allowing plans to set pricing on an individual basis. This means that young, healthy Americans are able to pay less to use an association health plan then what they may have been paying with an Obamacare plan.

With the rollout of association health plans, you can also expect to see new plan designs. Where some of these plans lack substance by offering minimal coverage for prescription drugs, they make up for it by providing great coverage for annual checkups. This makes AHPs especially attractive for people with no ongoing health conditions that require regular medications and office visits. Instead, individuals suffering with chronic conditions may find it more appealing to stick with their employer-based insurance or an Obamacare plan. There is also another major perk. Unlike Affordable Care Plans which are only open during a six-week open enrollment period, AHPs will be easier to access at any time.

How Are AHPs Growing in 2018?

To qualify to join an association health plan, you must meet certain criteria. Plan members must all share the same profession or industry, or they must all work in the same geographic location or state. For example, if you own an eatery you may want to join an association along with a group of other restaurants. You can then aim to get good coverage on common food industry issues, such as slips and falls, or burns. This setup helps get you the best coverage for your unique background.

President Trump first issued his executive order to encourage the expansion of association health plans on October 12, 2017. A final regulation to implement the order was released by the DOL on June 19, 2018. It is estimated that 4 million additional people will enroll in association health plans, and 3.6 million would seek to disenroll from other types of coverage. Based on a timeline set by the DOL, small businesses can expect to begin establishing fully-insured AHPs starting September 1, 2018. Any existing associations who have sponsored AHPs before that date may choose to establish a self-funded AHP starting January 1, 2019.

Learn More About Association Health Plans

small business owner contacting a benefits consultant to see whether she should enroll with the new association health plans With the expansion of association health plans, you may be wondering if you should seek out new health coverage. Know that the biggest beneficiaries for these new plans include self-employed owners who do not have employees, in addition to very small businesses with one or few employees. With the new rule association plans are now able to cross state lines making it easier to create and maintain affordable, quality healthcare coverage. For more information about association health plans or what plans are currently available, contact a professional benefits consultant today.