As the future of healthcare in the U.S. remains uncertain and, at times, confusing, we wanted to take a moment to share a potentially game-changing provision in a Presidential Executive Order that came late last year regarding Trade Associations and Small Businesses across the country.
The provision relates to the expansion of Association Health Plans (AHPs) and, given that Spring is a facilitator for one of the only two State-Approved Healthcare Cooperatives in Massachusetts, we are tentatively excited to see the administration loosening regulations for AHPs and recognizing the benefits that buying together offers to small businesses and employers. By joining together to purchase coverage for their employees, these businesses can dramatically cut costs while both better serving their employees and reinvesting in their own economic growth.
Small businesses specifically benefit from the freedom to join together across state lines and, in some cases, pool their risk by forming an AHP, because it opens up the freedom to craft coverage that better suits the needs of the companies and their employees. Without this option, these smaller employers often are forced to purchase overpriced plans that are either excessive or ill-suited for their workforce, wasting resources and straining their already tight finances.
This small provision in the executive order – and the new regulations that will soon follow – may well enable small businesses much greater control over building their benefits packages, but constructing a stable long-term Association Health Plan remains complex and challenging. Spring Consulting Group has developed best-in-class solutions for AHPs and their members, and recognizes the key role benefits play in helping businesses attract and retain the best possible workers.
The Executive Order was signed in October of 2017 and then went to the Department of Labor (DOL) and the Centers for Medicare and Medicaid Services (CMS) for consideration. As of January 4th, 2018, the proposed regulations are still on the table, and we are in a comment period until March 6th.
In what ways would the proposed regulation expand the market for Association Health Plans?
- It would allow a reclassification for AHPs, eliminating some prerequisites that previously existed, such as the provision of mental health services. This means more groups would qualify as AHPs.
- It would allow individuals to buy an AHP, something which wasn’t permitted previously.
- It would allow small business to band together for the purpose of affordable group healthcare, whereas before an AHP could only be formed as a sort of spin-off of a group that already existed for some other reason not pertaining to health plans.
- It would allow AHPs to be sold across state lines.
These are the most notable ways this could be a positive change for US healthcare, and one that opens many doors that had previously been closed. Now more than ever, it is critical that the accessibility of affordable yet effective health plans increases.
More About Association Health Plans
This video below spotlights what the AHP regulation means for businesses and existing associations. We provide an overview of AHPs, the current laws that pertain to them and the ways in which this could be a game-changer for your business or association.