NEW YORK – Small-business owners interested in buying insurance through an association health plan should tread as carefully as they would with any kind of health care coverage.
Labor Department rules that began phasing in Sept. 1 make it possible for sole proprietors and partners to join AHPs, something they couldn’t do under the Affordable Care Act. But there are still many unknowns about these plans – for example, whether the new rules will survive a lawsuit brought by 11 states and Washington, D.C., that claims they allow insurance to be sold that’s in violation of federal law. The rules allow very small companies to band together and act as a large company, and large companies are exempt from some of the Affordable Care Act’s coverage requirements.
Some tips for owners who are considering AHP coverage:
• Start with a broker or consultant. Health insurance brokers and human resources or benefits consultants know the available options – including whether a specific state heavily regulates association health plans. If you need to find a broker or consultant, survey your fellow business owners to find someone who’s knowledgeable and willing to help you learn. You might want to work with someone who charges you a fee instead of getting a commission from an insurer or association.
• Don’t be in a rush – there is much about AHPs that’s in flux. “The states are changing their rules to make it difficult or impossible” to set up an AHP, says Lorie Maring, an employment attorney with Fisher Phillips in Atlanta. While it might be possible now to set up an AHP in a given state, that might not be the case in the future. Maring sees 2020 as a more realistic date for being able to join an AHP.
• Go with someone you know. If your local chamber of commerce or a trade group you know well is creating an association health plan, or you hear of one being marketed by a company you’re familiar with, you might feel and be safer than with a plan that you know only from an online search.
• Be sure the plan gives you the coverage you want and that future rate increases are likely to be reasonable. The insurance is likely to be cheaper because it doesn’t have to provide the minimum essential coverage required by the ACA. And some plans are being set up with new medical services like direct primary care companies rather than traditional doctor networks. That may work for you; just know what you’re getting.
• Make sure the plan is on solid financial ground. “You want to know the stability, the financials of the AHP and what they’re predicting or guaranteeing as far as future rate increases,” says Michael Haffey, co-owner of Next Gen Ben, a benefit consultancy based in Indianapolis. Plans should make their financial numbers available to prospective buyers.
• If the prices look too good to be true, they may be. “Your program has to be solid, the pricing has to be realistic or otherwise it won’t be sustainable,” says Craig Scurato, a vice president with Leslie Saunders, an insurance and benefits broker based in Lutz, Fla. It’s a good idea in any case to get a second opinion from an attorney or consultant.