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Association Health Plans: Alternative Coverage for Small Businesses? (April 2018)

Changes to federal law would allow small businesses to band together

By Linda J. Sheppard, J.D. | April 16, 2018

Association Health Plans: Alternative Coverage for Small Businesses? (April 2018)

READ IT HERE−Association Health Plans: Alternative Coverage for Small Businesses?

On October 12, 2017, President Donald Trump issued Executive Order 13813, entitled Promoting Healthcare Choice and Competition Across the United States. It announced his administration’s intent to facilitate the purchase of health insurance across state lines and to increase the coverage options available to Americans. 

The order identified association health plans (AHPs) as one way to provide more affordable options to small businesses—including self-employed individuals—and it directed the Secretary of Labor to consider proposing regulations to allow more employers to form associations and participate in AHPs.

Key points from the brief include: 

  • Expanded access to association health plans (AHPs) will allow small businesses to band together to provide insurance for their employees and may give them increased bargaining power with insurers and providers. 
  • Proposed changes to federal law would also allow self-employed individuals to participate in AHPs.  
  • Under the proposed rule AHPs regulated under federal law would not have to comply with many of the Affordable Care Act’s (ACA) consumer protection and benefits requirements.
  • An expansion of AHPs could result in the loss of healthy individuals from the ACA-compliant individual and small group markets since AHPs could offer plans with reduced benefits and lower premiums.