AHP Rules for Dummies

By now, if you’re a member of an association, an independent contractor, a farmer or any number of more than 40 million people who currently work for companies with fewer than 20 employees, you may have heard about the Trump Administration’s recent announcement regarding Association Health Plans.  As avid followers of this, and other employee benefits news, we at Interesting Blazer are excited to present to you the inaugural post for the AHP Information Center.

The AHP Information Center represents a carefully curated collection of news, insights, and commentary by our collection of industry veterans.  To get started, we’ve included a brief, one-page overview provided by the DOL during the pre-announcement conference call on the morning of Tuesday, June 19th.

AHP Final Rule One-Pager DOL

What does this mean for you?

Are you an Independent Contractor, Farmer or member of the Gig Economy?

According to the Freelancers Union, you are one of more than 50 million people who self-identify as independent workers.  You may also wonder why the number of independent workers is greater than the number of people that work for companies with 20 or fewer employees.  Don’t worry, you’re not alone.  These data are compiled by the U.S. Census Bureau, by think-tanks and by organizations who commission surveys and as such, the criteria for inclusion in a group is often not consistent across each source.  Suffice it to say, there are millions of you!

The new AHP health plan rules could be great news for you.  Today you may be purchasing health insurance on the individual market or you may be purchasing short-term medical (STM) coverage to bridge the gap between your last full-time position and your next or you may be solving your health insurance needs some other way.  Regardless, you’re likely paying a lot for coverage or accepting a lot less coverage in exchange for lower premiums. Under the new rules, your association can provide health insurance coverage for you that will look and feel a lot like the insurance you would get from a large employer.  If you’re already a member of an association, like the Illinois Farm Bureau, check with your association leadership to see what their plans are.  If you’re not part of an association, look for one that you can join and if you’ve looked and there’s nothing that seems to fit, consider starting one.

Under the new rules, associations can now be formed based on a geographic location such as a metropolitan area and can even cross state lines.  So, for example, if you’re in Phoenix and are a self-employed individual, you could start an association of other self-employed individuals from all kinds of different industries and you could call it the Phoenix Area Laborer and Employee Organization (PALEO) – or something creative like that.

Are you an association leader?

If you’re leading an association that doesn’t already offer health insurance to its members, you might want to consider it.  There are a number of factors involved in offering health insurance.  If you’re looking for advice on how to get started, we’re offering free consultations from now through the end of August.  To prepare for the discussion, consider the following:

  1. How many members do you have?
    • How many are active vs passive?
  2. Where are your members located?
    • All in one city/state?  In a region?  National?  International?
  3. What kind of association do you operate?
    • Compulsory membership (i.e. Bar Association)?  Paid membership?  Free membership?
  4. Do your members currently participate in services offered by your association?
    • If so, what kinds of services?

Health insurance can be a huge benefit to your members and something that will strengthen the overall value proposition of your association.

What’s next?

There are a lot of things happening right now to prepare for the creation of new AHPs.  Insurers are considering what, if any, products they will be offering.  Brokers are approaching associations to gauge interest.  Third-party Administrators are working with re-insurance companies and actuaries to build self-funded AHP plan options and more.  Regardless of what twists and turns the AHP market takes, check back here for updates along the way.