Comment on Association Health Plans

The Department of Labor recently issued a final rule on association health plans (AHPs) that will help home building firms and local builder associations address rising health care costs and provide better health insurance coverage for workers and their families.

AHPs are group health plans that employer groups and associations offer to provide coverage for their members’ employees. They enable small employer members to benefit from the same regulatory and economic advantages that are available to large employers.

The new rule will level the playing field for small businesses seeking to provide easier access to better and more affordable plans for their workers and will place them on equal footing with larger entities when negotiating lower coverage costs.

The National Association of Home Builders has been a vigorous advocate of AHPs.

By allowing sole proprietorships and independent contractors to participate, the rule also expands access to affordable health coverage to small employers and self-employed individuals.

In addition, small businesses now have greater ability to join together locally or across state lines to purchase health insurance as a group through industry, professional, or trade associations. Establishing AHPs across state lines will provide additional flexibility for home builders associations putting such programs in place and may help members attract and retain talented workers by offering competitive benefits.

Other advantages of AHPs include more coverage options, enhanced ability to self-insure, fewer regulatory burdens and less complexity, and reduced administrative costs.

The new rule grandfathers in existing regulations so that local home builders associations already running successful AHPs can continue to offer affordable health coverage to employees under their current system or can choose to operate their program under the new definitions of the final rule.

Fifteen million Americans working for a small business or operating a sole proprietorship lack health coverage. With this new rule, 4 million Americans will join an AHP by 2023, according to estimates from the Congressional Budget Office.