In the midst of plenty of reasons to be skeptical about the prospect of healthcare as a whole, some good news has come for the more than 11 million Americans who are self employed or own/work for small businesses.
On June 19, 2018, the U.S. Department of Labor unveiled new regulations that would allow these small-business workers to participate in the same health coverage benefits as large employers.
Traditionally, the bigger employers have had the upper hand because they have the purchasing power and sheer volume to demand better rates, services and more from healthcare insurers and providers, while the smaller companies and self-employed workers pay through the nose on their own.
Now, working within existing laws, the new regulations will allow these smaller groups of workers to band together to be able to form their own Association Health Plans [AHPs], giving them–for the first time–negotiating power, cost savings and flexibility.
Dawn Sweeney, President of the National Restaurant Association, shared the following in The New York Post:
“On average, a single employee premium in 2017 was $6,690 according to the Kaiser Family Foundation. That cost is up 133 percent since 2002, which is significantly higher than core inflation and wage increases. Due to these high costs, small businesses offering insurance dropped from 63 percent in 2006 to 56 percent in 2016. Through AHPs, local coffee shop owners or restaurateurs now can join forces to create their own health plan.”
Previously, these Americans have been subject to the state healthcare exchanges under Obamacare, whose premiums have increased 105 percent since 2013. Sen. Lamar Alexander, in an opinion piece for The Washington Post, said that a plumber making $60,000 a year could easily pay $20,000 a year through the exchanges, and still wouldn’t be eligible for any subsidies.
AHPs would allow plumbers across the country, or small businesses from the same geographic area to band together and purchase healthcare that makes sense.
“If the appeal of an association health plan lures anyone from the exchanges, it will likely be because they’ve finally found a plan that meets their needs at a price they can afford,” Sen. Alexander shared.
Not only would AHPs present affordable and more sensible options for small businesses and the self employed, but they’d also carry the same patient protections as plans at larger companies.
“[T]his is proof that the answer to expanding access to affordable health care does not lie in increased federal spending, but instead in giving people the power to purchase the health care that best meets their needs,” Sweeney concluded.
We couldn’t agree more. At Captiva Benefit Solutions, that’s been our mantra all along, and as we’ve empowered mid-sized and large companies to make shrewd purchasing decisions through the Health Rosetta, we’re excited to soon start welcoming Association Health Plans into our midst, so we can get them the best patient care at the most reasonable prices with the most transparent service.
If you’re part of an AHP or are thinking about creating one in the wake of the new rule change, contact Captiva Benefit Solutions today to start a benefits advisor relationship that will fundamentally change the way your small business (or self-employment) functions–for the better.