President's Column

Tuesday, February 10

Association health plans a hit with small businesses

Washington's pioneering association health plans are a notable bright spot amid the complexity of health care reform.

A little history: Association health plans are the result of legislation backed by Gov. Mike Lowry in 1995 that encouraged small employers to join together in associations to provide good health benefits for their employees at an affordable price.

Back then, lawmakers in Washington recognized the need to create a more competitive market that would give small employers better access to high quality health care. Fast forward to March, 2010 when Congress enacted the Affordable Care Act (ACA) – association health plans have succeeded in accomplishing one of the main goals of the ACA: ensuring more people can obtain health care coverage. Since AWB created its HealthChoice plan in 1996 at the request of its members, more than 40 percent of the employers enrolled in the trust were previously uninsured.

Association health plans proved to be a hit from the beginning, and not just because they offered good benefits at an affordable price. They were also ahead of their time in offering guaranteed issue and renewal. AWB’s plans comply with state and federal ACA benefit mandates such as dependent coverage up to age 26 as well as lab and x-ray, preventive care and mental health services.

The experience with association health plans contrasts sharply with that of the government run Small Business Health Options Exchanges, called SHOP, which states are required to establish as part of the ACA.

So far, these SHOP exchanges have not taken off nationwide.

According to various news articles, small businesses are reportedly snubbing the SHOP program, saying the choice of offerings and the federal tax credits that come with them are limited.

Detailed data isn’t available yet, but one report by the Government Accountability Office released in November found that only 76,000 individuals working for 12,000 small employers had enrolled in a federal SHOP exchange as of last summer. By contrast, small businesses are flocking to association health plans like Health Choice, the plan that the Association of Washington Business established in 1995 to help make insurance more affordable to small employers.

Nearly 50,000 individuals are covered under AWB’s program alone, making it two-thirds the size of the enrollment in SHOP exchanges nationwide. The numbers are growing rapidly each month, too, and AWB’s program is just one of Washington’s association health plans.

So what's the problem with the SHOP program?

Too much bureaucracy and not enough pay-off, according to some observers.

A Missouri insurance broker told the Wall Street Journal that three of her small-business clients qualified for tax credits, but the programs are "so much work for little money that it wasn’t worth it."

The good news for small employers in Washington state have access to association health plans which not only provide high quality health, dental, vision and voluntary benefits, but also help streamline

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