Small Business Coverage Uncertain Future with Association Health Plans

For the last 20 years, small businesses in Washington state have relied heavily on associations and trusts to provide healthcare insurance for their workers at lower cost than in the open market. The system is popular and works well, a good deal for both employers and employees. Traditionally, small businesses had the option to buy insurance on the small group market or with an association/trust. In 1995, the WA legislature created rules for associations and trusts so employers with less than 50 workers could buy “large group” insurance. With the association plans thriving, the small group market became smaller and more expensive.

Now, heImage courtesy of [badmanproduction] FreeDigitalPhotos.netalth insurance coverage for small employers and their workers hangs in limbo. Obamacare has issued a new definition of what kind of associations can sell insurance, rejecting the majority of the state’s association and trust plans. The new rules state that the association must be formed for a purpose other than only selling insurance, and its members must work in the same industry. They must also offer appropriate rates, not charging more for sick people or women. So far only nine plans have passed these qualifications. Associations with disapproved plans have 90 days to appeal or move people to new coverage. If the new rules survive, the association plans will not. The final result for small businesses will be losing plans they liked and will see rates go up. Employers and TPAs (Third Party Administrators) can dramatically reduce their healthcare costs by harnessing the power of competition and transparency available through MediBid using our affordable employee healthcare plan for Employers and TPAs.
Stiffler, Lisa. “Health Coverage In Limbo For Many Small-Business Employees.” News. KaiserHealthNews, 13 Mar 2015. Web. 23 Mar 2015.

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