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Could an association health plan be the best small business option?

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John Wilcox

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in Centerpiece,Compensation and Benefits,Human Resources

Billed as an alternative to health insurance required by the Affordable Care Act, the Department of Labor has issued regulations allowing small businesses—including sole proprietors with no employees—to band together to form association health plans. The DOL claims AHPs will give small businesses some of the clout large employers enjoy when negotiating health benefits and rates.

While the plans may be right for some employers, due diligence is required before joining an AHP.

AHPs tick a lot of the popular boxes the ACA did. Association plans may not refuse to cover pre-existing conditions. All the anti-discrimination provisions that large employer plans have apply to AHPs. In other words, the plans and their insurers may not cherry pick the healthiest insureds to provide lower rates.

However, the AHP regulations give the plans some flexibility that regular ACA plans do not have.

AHPs are not required to cover 10 es...(register to read more)

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