Association-Sponsored Group Health Plans Could Lower Small Business Healthcare Costs
March 1, 2018
By Chuck White, Vice President of Regulatory Affairs
The U.S. Department of Labor (DOL) is taking comments on proposed changes to the rules governing Association Health Plans (AHPs). While association-sponsored group health plans are not new, the history of their usage has been ever changing. Hampered by unscrupulous operators, an inability to cross state lines and rules preventing small businesses or sole proprietors from attaining large group status, these programs had limited benefit in many states. The Administration has proposed solutions to these obstacles in an effort to lower healthcare costs for small businesses which would result in increased health care coverage.
Some of the proposed changes include:
- Associations in compliance with certain qualifications may be formed solely to provide group health insurance
- Participants would qualify for coverage based on the size of the total group, not the employer’s workforce, which allows smaller businesses to attain benefits generally reserved for larger organizations
- Commonality of Interest may be established by employers being in the same trade, industry, line of business or profession; or having a principal place of business in a region that does not exceed the boundaries of the same State or the same metropolitan area (even if the metropolitan area includes more than one State)
- A bona fide association, and any health coverage offered by the bona fide association, must comply with nondiscrimination provisions
- Dual treatment of working owners as employers and employees which, subject to certain qualifications, would include sole proprietors
- Absent knowledge to the contrary, the group or association sponsoring the group health plan may reasonably rely on written representations from the individual seeking to participate as a working owner
As with most rule makings, there is no certainty at this time that these provisions will survive intact; changes can result from public comment. However, the administration has indicated its intent to expand the use of AHPs to reduce the cost of healthcare.
PHCC is filing comments on this issue as it explores ways to lower health care costs for our members. Please send general feedback to firstname.lastname@example.org.