Association Health Plans...could be a new option for small business owners

November 05, 2018

Association plans have been around for many years; however, earlier this year President Trump made changes to the DEFINITION of an association for the purposes of providing health insurance to members, allowing more groups of small business and self-employed individuals to organize locally. The downside is that some states are not allowing groups to form if the sole purpose is to offer health insurance plans.

Two examples of groups taking advantage of the new rule... 1) the Nebraska Farm Bureau announced they will offer an AHP and 2) the Society of Collison Repair Specialist are looking for a carrier that would be willing to offer a health plan to its 6000 members, of which 75% said they are interested in an AHP plan. Read more. National Post Article. AHP plans

While many states are welcoming the new rule, 11 states and Washington DC are suing the Trump Administration over the rule. Some Congressmen are worried that they will go the way of some bankrupted Association plans from two decades ago. Side note: Does anyone remember when a number of HMO's had financial troubles and had to shut down in the 90's? Today, most large carriers offer both a PPO and HMO model of care; apparently, they figured out how to make them work. The same is true with association plans; they can work if managed properly.

What some individuals don't realize is that having the government decide what is to be covered under a health plan is not allowing the freedom for people to choose their own plan that suits their needs. There are some individuals who are ok with paying for an annual exam and wellness; some business owners can afford to self-insure the little stuff but want major medical in the event of a large claim such as cancer or a heart attack. Unfortunately, the ACA law REQUIRES all plans to offer FREE annual exams and a long list of other items that drive up the cost. A family of 4 making a $100,000 would not qualify for a tax-subsidy and could pay $2000/month for an ACA plan ($24,000/year, or nearly 25% of their income.) This premium is not tax-deductible to the family.

In 2019, the ACA plans have a maximum out of pocket for an individual of $7900 and $15,800 for a family. So on top of the $2000/month, if one family member met their out of pocket max, they have another $7900 to spend. Does that sound Affordable to you? Premiums for those who are in their 60's run between over $800/month for the cheapest Bronze HMO plan with a $6000 deductible and over $7000 out of pocket up to $1355 for the best Gold PPO plan. Many people who want to retire early and do not get retiree benefits are stuck with the reality that they can't afford to retire because they can't afford the health insurance!

Association plans offer small business owners the opportunity to purchase a major medical health insurance plan at more reasonable premiums. These are not stripped-down plans, but plans with access to a large network of providers (in some cases bigger networks than what the ACA offers) and at a lower premium. While there may be restrictions on some plans (you must use an outpatient facility for lab tests, for example...because the cost is lower than at a hospital) and even exclusions (they may not cover for a list of items - read exclusions carefully before buying), assocition plans work well for most people for everyday needs and even major hospitalizations and medical expenses.

The last time I checked, most people prefer choices when it comes to most things... buying a car, house, clothes...why not have more choices for health insurance coverage?

Anyone interested in Association Health Plans, please contact our office at or call 630-279-1739.