Analysis of New Association Health Plans Reveals Promising Trends
NASHVILLE, Tenn., Jan. 30, 2019
NASHVILLE, Tenn., Jan. 30, 2019 /PRNewswire/ -- A new report released today by AssociationHealthPlans.com shows promising benefit and cost trends among 28 association health plans (AHPs) recently launched in 13 states. The analysis, which offers important insights about how the market is responding to a new Department of Labor regulation finalized in June 2018, shows a trend toward comprehensive benefits and double-digit cost savings.
The Department of Labor regulation, which is being implemented in stages, makes it easier for small employers to band together to offer lower-cost "large company" health insurance. The breadth of benefits had been one of the biggest concerns among detractors of association-based insurance. However, according to the analysis, no evidence of narrow benefit designs was observed in the new AHP benefit descriptions. Moreover, advanced features such as health savings accounts (HSAs) also have a strong presence among the new plans.
"The final rule will not be fully implemented until April, but we're already seeing 28 new association health plans in 13 states, and the results are promising for small businesses and consumers," said Kev Coleman, president of AssociationHealthPlans.com. "Not only are we seeing a trend toward comprehensive benefits, but these groups are also claiming double-digit premium savings for their members, a welcome development for small businesses that have long struggled with rising health care costs."
States with new association health plans include Texas, Florida, Ohio, Georgia, Michigan, Wisconsin, Minnesota, Alabama, Oklahoma, Nevada, Nebraska, West Virginia and Vermont.
As noted last fall by the National Conference for State Legislatures, small businesses pay on average 8 percent to 18 percent more than large companies for the same health insurance. Sole proprietors and the self-employed can pay even higher amounts than multi-employee businesses if they purchase individual health insurance without the benefit of a subsidy.
Other highlights of the report include:
- Regional associations launched 71 percent of new AHPs. Employers in an association health plan must share a professional similarity or the same business region. The most common sponsors for regional associations were chambers of commerce. In fact, four out of five regional associations were sponsored by chambers of commerce.
- Major industry players are heavily involved. Among new association health plans, 86 percent are insured by a third party as opposed to being self-funded. UnitedHealthcare and Blue Cross Blue Shield insurers are the most common companies in this emerging market and collectively provide 75 percent of coverage for AHPs that do not self-fund.
- 43 percent of new AHPs are available to sole proprietors and the self-employed. One of the major changes to association health insurance under new regulation is its ability to cover self-employed individuals who are not part of a business with other employees.
- Half of new AHPs include a medical savings account option such as an HSA.
- Multi-state AHPs are taking longer to enter the market, which is not surprising given the additional preparation and insurance filings involved in multi-state AHPs.
Additional findings as well as the report's methodology can be reviewed at "First Phase of New Association Health Plans Reveal Promising Trends."
Kev Coleman is founder and president of AssociationHealthPlans.com , the leading online resource supporting the emerging association health plans market. AssociationHealthPlans.com is headquartered in Nashville, Tennessee.
Amy Fletcher Faircloth
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