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Do Association Health Plans Save Money?

Association Health Plans can offer more savings and benefit choices to its members. By banning small businesses togehter into one large group, the Association has more negotiating power and access to lower cost benefits.

There are promising benefit and cost trends among 28 association health plans, or AHPs, recently launched in 13 states, data released by shows.

The analysis, which offers insights about how the market is responding to a new Department of Labor regulation finalized in June 2018, shows a trend toward comprehensive benefits and double-digit cost savings -- although controversy remains surrounding AHPs, particularly when it comes to consumer protections.

The Department of Labor regulation, which is being implemented in stages, makes it easier for small employers to band together to offer lower-cost "large company" health insurance. The breadth of benefits had been one of the biggest concerns among detractors of association-based insurance.


Regional associations launched 71 percent of the new AHPs, the data showed. Employers in an association health plan must share a professional similarity or the same business region; the most common sponsors for regional associations were chambers of commerce, which sponsored four out of five regional associations.

Major industry players are pretty heavily involved. Among new AHPs, 86 percent are insured by a third party as opposed to being self-funded. UnitedHealthcare and Blue Cross Blue Shield insurers are the most common companies in this emerging market and collectively provide 75 percent of coverage for AHPs that don't self-fund.


States with new association health plans include Texas, Florida, Ohio, Georgia, Michigan, Wisconsin, Minnesota, Alabama, Oklahoma, Nevada, Nebraska, West Virginia and Vermont. This is constantly changing with new legislation.



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