Association health plans for small business are expanding as a result of a new Federal rule. Ultimately, the biggest beneficiaries will be self-employed owners with no employees, as well as significantly small businesses with as few as one employee. These small business owners will be able to shop for and join association health plans. This is an expansion over existing state laws that generally limit association plans to employers that have a minimum of at least 50 employees.
The new rule also gives authority for association plans to cross state lines. Furthermore, the new association health plans will have expanded consumer protections, including pre-existing conditions coverage.
This, of course, is all due to a new Department of Labor rule issued on June 19, 2018. The effective date starts September 1st. According to the Department of Labor, 4 million Americans could become insured under Association health plans.
So, what exactly are Association Health Plans?
Plain and simply, association health plans allow small businesses to band together with other businesses for health insurance plans. Local business groups and even nationwide industry groups will be able to offer association health plans that meet certain rules.
If you’re a small business owner, Global Resources LLC consultants recommend understanding the following ten points about association health plans.
- While association health plans do, in fact, exist today, the new rule expands upon them.
- Association health plans under the new rule will have expanded consumer protections.
- Families and employees are also eligible for coverage.
- Premiums and coverage terms are up to each plan.
- Insurers are not required to offer Association plans.
- Association health plans for small business are largely outside of the ACA and not subject to Obamacare rules.
- The new rule does not change or affect any existing association health plans.
- The new Association health plans must meet certain legal requirements.
- The new rule goes into effect September 1, 2018.
- More information is available online. The full Department of Labor rule can be found here. The FAQs are easier to read and can be found here.
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