The Trump administration just released information on the upcoming rules for association health plans (AHPs). Association health plans will allow groups of small business owners to join together in buying health insurance. The benefit will be lower cost plans, but the lower price may come at reduced benefits.
A large change is that there are fewer “required benefits” that each plan must offer. One of the reasons health insurance is currently so expensive is due to the large amount of required benefits every major medical plan must offer. Now companies will be able to pick and choose between the benefits they want to offer their employees.
Another change is that plans will be able to charge different amounts to different types of companies. So companies that work in industries with low risk of injury or sickness may be able to get better prices.
The new rules do not allow exclusion or discrimination against individuals because of preexisting health conditions.
One of the main positives of these new rules will be more health insurance choices for consumers and more competition between health care providers. The competition will drive prices down and companies’ ability to customize their coverage should drive prices down further.
Another positive benefit is the ability to group together with other, similar companies to buy insurance. This grouping will allow companies to access better rates, similar to what large groups have access to currently.
Here is the full press release from the U.S. Department of Labor.
From the article: “Under the Department’s new rule, AHPs can serve employers in a city, county, state, or a multi-state metropolitan area, or a particular industry nationwide. Sole proprietors as well as their families will be permitted to join such plans. In addition to providing more choice, the new rule makes insurance more affordable for small businesses. Just like plans for large employers, these plans will be customizable to tailor benefit design to small businesses’ needs. These plans will also be able to reduce administrative costs and strengthen negotiating power with providers from larger risk pools and greater economies of scale.”
Georgia Health Insurance will be closely monitoring the development of Association Health Plans and will be offering the best plans on the market for Georgia small groups. Give us a call if you would like to talk about Association Health Plans for your small business.
