Under newly approved federal rules, two small businesses groups in Michigan are offering to their members the option of banding together to purchase large group-type health insurance products and potentially receiving lower premium rates for their employees under "association health plans."
The Small Business Association of Michigan and MichBusiness have created TranscendAHP, a federally enabled association health plan, and are working with Blue Cross and Blue Shield of Michigan and Blue Care Network to offer 10 different large group plans.
TranscendAHP is one of the first in the nation under an executive order signed by President Donald Trump in October 2017 and rules approved by the U.S. Department of Labor in June. The AHPs, which could be offered across state lines, are considered multiple employer health plans and offer the same protections as afforded larger companies under the federal Employee Retirement Income Securities Act, or ERISA.
The Affordable Care and Patient Protection Act of 2010 allowed for an expansion of association health plans, but only through small group health plans. The new federal rules allow AHPs to offer large group health insurance products and be regulated under federal law. However, AHPs that offer products across state lines must follow insurance regulations under the states in which they are licensed.
"President Trump is expanding affordable health coverage options for America's small businesses and their employees," said Alexander Acosta, Department of Labor secretary, in a statement. "Many of our laws make healthcare coverage more expensive for small businesses than large companies. Association Health Plans are about more choice, more access, and more coverage."
Jennifer Kluge, president of MichBusiness, formerly the Michigan Business and Professional Association, echoed that statement, saying small business owners and employees need affordable healthcare insurance options to help them complete with larger companies in a tight labor market.
"Access to comprehensive health insurance programs continues to rank at the top of small-business owners' concerns," Kluge said in a statement. "Working together with SBAM gives our members the best solution for the healthcare needs of their employees."
Rob Fowler, president of SBAM, said the two professional business groups have been working to offer small business owners across Michigan the best health insurance options with comprehensive coverage and quality networks. "As a result of these changes from Washington and our historic partnership, this new AHP is the next chapter in that history," he said.
Under TranscendAHP, small business members of SBAM and MichBusiness will have access to health insurance products previously available to only larger employers, an option made possible by their organizations' relationship with the Michigan Blues, Fowler and Kluge said.
Sandy Fester, Blue Cross' vice president of middle and small group business, said the number of large product offerings for TranscendAHP are still being worked out, but Blue Cross will not be developing new products for the AHP.
"We will use our current large group products menu" for TranscendAHP, said Fester, noting that each large group client has different pricing arrangements based on their size, geography and benefit offerings.
Ed Murphy, president of PM Group Benefit Advisors II LLC, an Auburn Hills-based affiliate of Plante Moran PLLC, said federal rules allow all associations to establish a fully insured AHP beginning Sept. 1. Those that had sponsored a self-insured AHP before June 21 may expand beginning Jan. 1.
"These new regulations expand prior rules in terms of funding, structure, and regulatory compliance of association plans," said Murphy, adding: "The goal, being, to expand the availability of plans to a broader base of employers, allow more plans to be offered, produce more cost effective plans by virtue of larger, more stable risk pools and mitigate some of the more cumbersome regulations that plague smaller employers in the operation of healthcare plans."
Murphy said all existing association health plans are different based on market strategies, pricing, administration and benefits.