The Senate unveiled the Better Care Reconciliation Act of 2017 (H.R. 1628) on June 22, a bill that would effectively repeal and replace the Affordable Care Act and introduce a number of provisions impacting how more than 12.7 million people obtain health insurance. The bill would also grant small businesses and associations the ability to establish small business health plans that operate outside of state insurance regulations.
These association health plans (AHPs), also known as group trusts, multiple employer welfare associations (MEWAs), or Small Business Health Plans (SBHPs), would provide more than 28.5 million small employers with the option to offer competitive and affordable health benefits to employees and maintain common benefits across state lines. This would be achieved when small businesses with healthy employees join associations and sign up for plans with fewer benefits and lower premiums. This in turn would allow cost savings to be passed down to their employees along with heightened purchasing power. An example of this could involve a group of restaurants that form a restaurant association and purchase insurance as a group.
According to supporters of this Senate bill provision, this would allow small businesses to buy more affordable coverage. “Association demand for a Private Exchange would be strong. Especially one that could accommodate a number of carriers and ancillary plans, and incorporate some consumer incentives like HSA’s and wellness,” stated Michael Baker, Softheon’s Director of Broker Solutions. “The ability to have fully insured experience rates would also give the Association a possible advantage over commercially available plans. It would be very attractive,” added Baker. Opponents of the measure have cautioned that this could undercut the insurance market and lead to harm of consumers. 
Before the Affordable Care Act, national associations would pick and choose which states’ insurance rules to abide to, throughout the country. This meant that the association could adopt the rules enforced by New York’s insurance market and apply those in other states.  However, the Affordable Care Act changed these rules by mandating that all AHPs cover the 10 Essential Health Benefits (EHB). The Senate bill aims at re-introducing more flexibility to these AHPs, by allowing them to select the benefits their health plans will cover. If the Senate passes the bill, it would have to go back through the House to gain approval.
Earlier this year (March 22), the House of Representatives passed the Small Business Health Fairness Act (H.R. 1101), which could make it easier for small businesses to offer employee coverage. The bill, which was passed on a party line vote of 236-175, would do so by allowing small businesses to come together and offer coverage through AHPs within the small group market. Following this announcement, the White House issued a public statement citing that “H.R. 1101 would enable small businesses to provide health benefits to their workers through trade and professional associations, potentially benefiting millions of American families…Small businesses also would benefit from larger risk pools, increased negotiating power and administrative efficiencies, decreasing costs for their workers.”
The views and opinions expressed by the authors on this blog website and those providing comments are theirs alone, and do not reflect the opinions of Softheon, Inc.
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