What are Association Health Plans?

Association health plans (AHPs) are a type of group health insurance that allows small businesses, freelancers, and self-employed individuals to join together and access the benefits and savings of large group health plans. AHPs are offered by associations that are formed based on a common profession, industry, or geographic area. AHPs can provide lower premiums, more flexibility, and better negotiation power for their members.

How do AHPs work?

AHPs work by pooling together multiple employers and individuals into a single large group health plan. By doing so, AHPs can avoid some of the regulations and costs that apply to small group and individual health plans under the Affordable Care Act (ACA). For example, AHPs can design their own benefit packages without having to cover all the essential health benefits required by the ACA. AHPs can also negotiate better rates with insurers and providers, or even self-insure to lower their administrative expenses and avoid health insurance taxes.

Who can join an AHP?
To join an AHP, you must be a member of an association that meets certain criteria. The association must have a formal organizational structure, be controlled by its members, and have a commonality of interest among its members. The association must also exist for a purpose other than offering health insurance, such as promoting the interests of its industry or profession. The association must not discriminate against any member based on their health status or claims history.

What are the advantages and disadvantages of AHPs?

The main advantage of AHPs is that they can offer lower premiums and more choices for their members. AHPs can also provide more stability and continuity for members who may change jobs or locations frequently. AHPs can also foster a sense of community and solidarity among members who share a common interest or identity.

The main disadvantage of AHPs is that they may not provide adequate coverage or protection for their members. AHPs may exclude or limit some benefits that are essential for some people, such as maternity care, mental health services, or prescription drugs. AHPs may also vary in quality and reliability depending on the association's governance and financial management. AHPs may also face legal challenges from state regulators or other stakeholders who oppose their expansion.