11 March 2024

Association Health Plans: What Small Business Owners Should Know

By Ronald Smith

I’m here to tell you all about association health plans and why they matter to small business owners like you. So, let’s dive in and explore the top 10 things you need to know.


Understanding Association Health Plans

Association health plans are a way for small businesses to come together and provide health insurance to their employees. By joining forces, you can gain access to better coverage and potentially save on costs.


Eligibility for Association Health Plans

To be eligible for an association health plan, you need to be a small business owner with at least one employee. The plan can cover business owners themselves, as well as their employees and dependents.


Increased purchasing power

By joining an association health plan, you can leverage the collective purchasing power of the group. This means you may be able to negotiate better rates and benefits from insurance providers.


Flexibility in plan design

Association health plans offer flexibility in plan design. You can tailor the coverage to suit the needs of your business and employees. This means you have more control over what is covered and how much you pay.


Protection against premium increases

Association health plans can provide protection against premium increases. When you join a larger pool of participants, your risk is spread out, which can help stabilize premiums and prevent drastic hikes.


Continuation of coverage

If a member leaves the association or business, they may be eligible for continuation of coverage under the association health plan. This helps ensure that individuals do not lose their health insurance when circumstances change.


Compliance with state and federal regulations

Association health plans must comply with both state and federal regulations. This helps protect you and your employees by ensuring that the plan meets all necessary standards and requirements.


Access to additional resources

Association health plans often provide access to additional resources, such as wellness programs and preventive care. These extra benefits can help improve the overall health and well-being of your employees.


Portability of coverage

In some cases, association health plans may offer portability of coverage. This means that employees can take their health insurance with them if they leave the business or association.


Consultation with a professional

When considering an association health plan, it is important to consult with a professional, such as an insurance broker or legal advisor. They can guide you through the process and ensure you make the best decision for your business.

In conclusion, association health plans can be a valuable option for small business owners and their employees. By joining together, you can gain access to better coverage, increased purchasing power, and more flexibility in plan design. Remember to carefully consider your options and seek professional advice to make an informed choice.

Association Health Plans: What Small Business Owners Should Know

I have some exciting news for small business owners like you! Thanks to a new Federal rule, association health plans for small businesses are expanding. Now, this may sound a bit complicated, but let me break it down for you.

First, let’s talk about who will benefit the most from this expansion. If you’re a self-employed owner without any employees, or if you run a very small business with just one employee, then this is great news for you. You’ll soon have the opportunity to shop for and join association health plans.

But what exactly are association health plans? Well, they’re a way for small business owners like yourself to access affordable health insurance options. And here’s the exciting part: the new rule allows association plans to operate across different states. So, you’ll have even more choices and flexibility when it comes to finding the right plan for you and your business.

Now, let’s talk about the important stuff – consumer protections. The new association health plans will have expanded coverage to protect people with pre-existing conditions. That means you won’t have to worry about being denied coverage just because you have a health issue.

Now, I know all of this may sound overwhelming, but don’t worry. I’m here to guide you through it. The reason all of this is happening is because the Department of Labor issued a new rule on June 19, 2018. And guess what? The rule becomes effective on September 1st.

So, mark your calendars! Starting September 1st, small business owners like you will have more options, more protection, and more opportunities to find the right health insurance plan. I’m here to support you every step of the way. Let’s navigate this together and make sure you and your business are taken care of.

The DOL says that 4 million Americans could eventually get health insurance under Association health plans, according to the Congressional Budget Office (CBO).

This action is a result of President Trump signing an Executive Order in October 2017. In this order, the President instructed the Department of Labor to create new rules for expanding association plans.

What are Association Health Plans?

Association health plans allow small businesses to join together and offer health insurance plans. These plans are available to local business groups and even nationwide industry groups, as long as they follow certain rules.

When we come together as a group, we can help distribute the risk of insurance among more people. This means that small businesses will have a better chance of getting affordable health coverage by spreading the risk over a larger pool.

Before the 2018 rule, small business owners who worked alone (without any employees) couldn’t join association plans. Out of America’s 30 million small businesses, about 24 million don’t have any employees.

In the past, those business owners without employees might have relied on their spouse or another family member’s health insurance for coverage. Others had to go through the individual plan market and were eventually directed to Obamacare plans.

Important Information about Association Health Plans for Small Businesses

  • I’m happy to tell you that there’s something called association health plans. They’re pretty cool, but now they’re even better! These plans are for business owners who don’t have any employees and for small businesses that do have employees. And guess what? Now association plans can be nationwide! That means they can cross state lines and be available to people all over the country. The President wanted to make sure these plans were more widely available to everyone.
  • But that’s not all! Association health plans now have better protections for consumers. That means they can’t treat you unfairly or charge you more just because you have a pre-existing condition or a health issue. They also can’t kick you off the plan if you get sick. Plus, they can’t be picky about who can join based on their health. They have to let everyone be a part of the plan, no matter what.
  • Each plan determines the premiums and coverage terms. The new rule does not set insurance premium rates or limits. It also does not establish required levels of coverage like Obamacare does.
  • Insurers are not obligated to provide Association plans. It will be the decision of individual insurers and associations whether to offer such plans. Whether your small business will have access to an Association plan depends on what is available in the market, which will be determined later on.
  • Association health plans for small businesses are mostly not governed by the ACA and do not follow Obamacare regulations. With the new rule, small businesses will have to carefully assess the coverage.
  • The new rule doesn’t change anything for existing association health plans. These plans can still continue just as they are, following their current rules and coverage. However, if they want to include smaller businesses or expand their reach, they have to follow the new guidelines. The new Association health plans, on the other hand, must meet certain legal requirements. This is to make sure that there is no fraud or unfair practices. The Department of Labor rule states that employer members need to have control over the association. This means that they have a say in how it is governed. The plans also need to comply with all state insurance regulations and be supervised by state insurance authorities. If a plan is self-insured, there are additional requirements that it has to meet too.

By having these rules in place, we can ensure that association health plans are fair, transparent, and provide adequate coverage to all members. It’s important for both existing and new plans to follow these rules so that everyone is on an equal playing field.

  • You can find more information online. The full Department of Labor rule can be found here. For an easier read, check out the FAQs here.
  • What People Think about Association Health Plans

    When it comes to healthcare, everyone has a different opinion about the new rule.

    The Department of Labor received 900 public comments before they made the new rule official. They said, Small business owners who left comments were really in favor of the Proposed Rule because it gives them more choices to get affordable healthcare for themselves and their employees.

    How business owners feel about the new Association plans may depend on their experience with Obamacare, and it’s a bit of a mixed bag. Obamacare affected people in different ways, depending on their own situations.

    At USamerica.US, we’ve talked to some small business owners who found Obamacare to be really helpful. Some of them were able to get coverage for long-term health conditions that they couldn’t afford otherwise. We also heard stories of owners who got subsidies that brought down their insurance rates. For folks like them, Obamacare was a real lifesaver.

    But let me tell you, not everyone had the same experience. Some small business people actually got disrupted and squeezed out of their old insurance plans. They had fewer options to choose from and ended up having to buy coverage on the ACA marketplace. And guess what? The rates were much higher and the deductibles were bigger. I mean, just to give you an example, my own insurance premium went up four times when my family moved to another state and our old health plan was no longer valid under Obamacare.

    So when something gives you more options, provides affordable plans, and protects your rights as a consumer, it really helps out small businesses. This new rule is trying to make it easier for all of these things to happen by getting rid of unnecessary regulations.

    • Take, for example, the NFIB. They had tried to fight against Obamacare in court but didn’t succeed. And now, they actually support this new rule. In a statement, the CEO of NFIB, Juanita Duggan, said, After the Senate couldn’t get rid of Obamacare, we’re thankful that President Trump is taking steps to fix regulations that make it harder and more expensive for small business owners to offer healthcare to themselves and their employees.
    • The NSBA commended the DOL for its efforts to address healthcare. However, the NSBA also expressed concerns about potential negative consequences of Association plans. They worry that these plans could increase insurance costs for certain small businesses. Additionally, the NSBA emphasized that these plans, which mostly exist outside of the ACA, may provide less coverage and less favorable terms compared to Obamacare plans. You can find more details about the NSBA’s analysis here.

    Some state attorneys general have threatened legal action due to concerns about regulatory oversight if Association plans are allowed to operate across state lines. The outcome of these challenges remains uncertain.

    What Small Business Owners Can Do Now

    It will take some time before new Association offerings become available. Therefore, there is no immediate action required at this time.

    I think it might be a good idea for you to consider joining a business group that offers Association health plans. You can talk to other business owners in your area or industry and find out how they are getting health coverage.

    When you’re searching for an Association plan, make sure to shop carefully. Take a close look at the coverage terms because the plans might not have the same level of coverage as the ones mandated by the ACA. It’s also important to check the financial stability of any association plans before you sign up.

    Lastly, don’t forget to have a chat with your insurance agent. Let them know that you’re interested in Association health plans. They might be aware of any new offerings that could be suitable for you.