The Donald Trump administration recently made a decision on healthcare that could effectively change how small groups offer medical insurance to their employees forever. On June 19th, 2018, the Trump administration ruled in favor of expanding access to Association Health Plans for healthy individuals. So what exactly is an Association Health Plan?
Association Health Plans (AHP) encourage healthy people to seek cheaper, less robust coverage options. These health plans will not cover certain catastrophic procedures or drugs, so a major medical supplement plan may be needed to complement AHPs. However, by excluding certain drugs or procedures, insurers are able to dramatically reduce premiums for individuals. Moreover, Trump’s ruling is making it easier for small-group AHPs to meet ERISA standards and relaxes business’ requirements for association plan eligibility.
Currently, healthcare trend averages somewhere between 8% – 12% each year, which is unsustainable for any employer, but especially those in the small group market. According to a study conducted by Avalere Health, they project “premiums would increase by as much as 4% between 2018 and 2022”, a much more affordable solution for employers and employees alike. If you would like to learn more about Association Health Plans, please contact Axion RMS today!