Our Positions: Association Health Plans

The following is PHCC’s position on association health plans as of Mar. 6, 2002. For more information or questions, email government@naphcc.org.  


Due to the administrative burden and high cost of having to comply with 50 different sets of state insurance laws and regulations, associations are reluctant to offer health care coverage to their members. These barriers discourage new plans from starting, and thus limit the availability of affordable health insurance to small businesses. According to the Employee Benefits Research Institute, 60% of the 43 million uninsured Americans reside in a family employed by a small business. Additionally, a worker in a firm with less than 10 employees pays 18% more for health insurance than a worker in a firm with 200 or more employees.

Association Health Plans (AHPs) are market-oriented mechanisms that empower small entrepreneurs with the same “pooling” tools which large employers use to make health coverage affordable for their workers. AHPs can reduce health insurance costs 15% 30% by allowing small businesses to “pool” together to obtain the same economies of scale, purchasing clout, and administrative efficiencies now available to employees in large employer plans.

The Small Business Health Fairness Act of 2001 was introduced in May and is sponsored by Reps. Ernie Fletcher (R-KY) and Cal Dooley (D-CA). The act would amend the Employee Retirement Income Security Act allowing small companies to form insurance pools and join together with bonafide trade associations, like PHCC, to purchase health insurance, thus enjoying the same uniform regulation, economies of scale, and administrative efficiencies that large companies currently enjoy.


During consideration of the Patients Bill of Rights (PBOR) legislation, an amendment to provide for “increased access to health care” was offered that included provisions similar to that in the Fletcher-Dooley bill that would allow associations to offer health care coverage to its members. The amendment was offered, and passed, during the House’s consideration of PBOR. However, the Senate bill does not reference association health plans. Increased access will be one of the items considered during conference committee deliberations between House and Senate members.


PHCC supports legislative proposals to increased access for health care and other efforts to make health care more affordable for PHCC members. PHCC supports proposals to provide access to health care for the millions of uninsured.