ASSOCIATION HEALTH PLANS
On June 19, 2018, the Department of Labor (DOL) released a final rule that gives small businesses more freedom to join together as a single group to purchase health insurance in the large group market or to self-insure. These benefit arrangements are called association health plans (AHPs).
By forming AHPs, small employers can avoid certain Affordable Care Act (ACA) reforms that apply to the small group market and will provide small employers with more affordable health insurance options.
Requirements for creating an AHP are:
- The employers are in the same trade, industry, line of business or profession.
- The employers have a principle place of business within a region that does not exceed boundaries of the same state or the same metropolitan area (even if the metropolitan are includes more than one state).
- The primary purpose of the group or association may be to offer and provide health coverage to its employee members; however, the group or association also must have at least one substantial business purpose unrelated to offering and providing health coverage or other employee benefits to its members.
- Each employer member of the group or association participating in the group health plan must be the employer of at least one employee who is a plan participant.
- The group or association has a formal organizational structure with a governing body and has bylaws or other similar indications of formality.
- The group or association’s member employers control its functions and activities, including the establishment and maintenance of the group plan.
- Only employees and former employees of the current employer members (and family members of those employees and former employees) may participate in the group health plan sponsored by the association.
- The group or association is not a health insurance issuer (or owned or controlled by an issuer or by a subsidiary or affiliate of an issuer).
AHP’s are a type of multiple employer welfare arrangement (MEWA). Ware insurance has created a team with the experience of creating and administering a MEWA.