A new report shows that some small employers may be missing out on important consumer protections under the Affordable Care Act (ACA) by purchasing heath insurance through an association health plan (AHP). Some professional and trade associations offer AHPs as a benefit to their members, but in other instances, associations are created solely as a way to market and sell health insurance. The report, prepared by researchers at Georgetown University with funding from the Robert Wood Johnson Foundation and Urban Institute, illustrates that because of state and federal policy towards associations that market to small employers, some AHPs may be able to sidestep key consumer protections that otherwise apply to coverage sold in the small group market under the ACA.
To understand the effect of the ACA on the AHP market, the authors examined Oregon as a case study since the state had a sizable AHP market prior to health reform. They write that Oregon insurers claim some AHPs are considered a single large group health plan under the Employee Retirement Income Security Act and not required to meet the ACA protections for the small group market. The authors go on to say that small employers who purchase their coverage through these AHPs are exposing themselves to plans that may not cover the essential health benefits mandated by the ACA for the small group market. In addition, they could find themselves discriminated against based on age, gender or health status—also not allowed under the ACA for the small group market. Despite these risks to consumers, the report authors note that AHPs have the potential to grow their market share in the state.
“Forming association plans is one of the ways that employers can avoid some of the requirements of the ACA,” said Katherine Hempstead, who directs coverage issues at the Robert Wood Johnson Foundation. “In these situations, employees are usually offered coverage, which is less comprehensive than what’s available in the marketplaces."
The report and its findings are derived from in-depth telephone interviews with state regulatory officials, health benefit consultants, and representatives of associations and insurers that participate in the AHP markets.
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To speak with an expert about today’s report, please contact Frank Walsh at [email protected] or 504-309-5164.
