From the Desk of Bob McNett…..

Association Health Plans Could be a New Force in the Group Health Insurance Market.

The Trump administration recently released an administrative ruling that would allow Association Health Plans (AHP’s) to operate in the group health insurance marketplace.

AHP’s are not a new concept.  We saw these plans operating in many states, including Oklahoma, years ago, under such names as “National Association of Self-Employed” and other entities.  I never offered these plans to clients because of my concerns about their financial stability. At that time,  I began seeing insureds on these plans experiencing major claims problems and other administrative issues.  After a number of years, these plans gradually faded from the marketplace.

Under the new ruling, small businesses or people who are self-employed may join together to form larger groups based on a common industry or geographic location.

However, the Trump administration’s ruling will give these AHP’s a price advantage over plans offered in the current group health insurance marketplace.  AHP’s will not have to comply with a number of the requirements of plans that currently comply with the Affordable Care Act.   AHP’s will not be required to provide the same comprehensive benefits or the same premium protections as plans that comply with the Affordable Care Act.

The administrative ruling will allow these plans to be offered as of September 1 of this year.  However, I have seen no such plans being offered in our local market as of yet.

I advise McNett Agency group insurance clients to be careful if they are approached by someone marketing AHP’s.  The premiums may be lower than your current Affordable Care Act-compliant plan, but there are reasons for this, as described above.  I can remember how poorly these plans performed years ago when they were operating nationwide, writing quite a bit of business.  After a period of time, law suits were flying right and left, and insurance commissioners in many states became involved as these plans spiraled downwards.

Past experience does not necessarily predict the future. However, it does provide reasons for exercising caution.

We will be keeping a sharp eye out if we see these plans in our market, and will report to McNett Agency clients.

Robert K. McNett, LUTCF

The McNett Agency

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