INTRODUCING THE ASSOCIATION GROUP SPONSORED HEALTH PROGRAM
Navigating today’s complex healthcare landscape can feel overwhelming, but having the right team on your side can make all the difference. That’s where an Association/Affinity Group Sponsored Health Program (AHP) comes in.
With rising healthcare costs, smaller employers often find themselves stuck with expensive, rigid health plans. AHPs offer a solution by allowing businesses within the same industry or association to band together, pool resources, and offer more affordable, flexible healthcare options to their members.
In simple terms, an AHP lets small businesses join forces to access the kind of group health benefits usually reserved for larger companies. By pooling their risks, smaller businesses can get more comprehensive, ACA-compliant healthcare plans—at a lower cost. This strength in numbers approach gives smaller employers access to better terms than they would likely find on their own.
New DOL Rule Expands Health Plan Options
A new rule from the U.S. Department of Labor (DOL) makes it even easier for small businesses to join AHPs. It broadens the definition of “employer,” which means businesses in the same industry, affiliation group or even just those located in the same area, can come together to offer health plans. This opens the door for small businesses and even sole proprietors to access large-group health plans. The result? Potentially lower costs and more flexibility when it comes to healthcare.
Tailored Health Plans for Individual Groups
AHPs are particularly beneficial for Association/Affinity Groups. These groups can create health plans tailored to the specific needs of their members. This kind of customization leads to more meaningful benefits for members, and since the plans are more relevant, the premiums are often lower compared to standard insurance options.
For smaller employers who are worried about the unpredictability of self-funding, level-funded plans offer a nice middle ground. These plans mix the stability of fully insured plans with the flexibility of self-insured ones. Businesses pay a fixed monthly fee to cover expected claims, plus stop-loss insurance to protect against any unusually high claims. If claims turn out to be lower than expected, employers might even get a refund at the end of the year—making these plans a great choice for risk-averse businesses.
The Bottom Line
In today’s world of rising healthcare costs, AHPs offer a smart, practical way for small to medium-sized businesses to access affordable, tailored healthcare plans. By pooling resources, Association/Affinity Groups can offer their members real savings while improving the benefits they receive. Plus, these groups get the added bonus of boosting their own financial health. It’s a win-win for everyone involved!