In this Wednesday, Oct. 17, 2018 photo, Melissa Perlman, owner of BlueIvy Communications, a public relations and communications agency, poses for a photo in Delray Beach, Fla. Perlman hasn’t been able to afford insurance for her staffers since starting her public relations company, BlueIvy Communications, in 2011. She’s interested in the potential association health plan, or AHP, being considered by the Greater Delray Beach Chamber of Commerce; the southern Florida group recently began surveying members about their interest in an AHP. (AP Photo/Wilfredo Lee)As small business owners shop for 2019 health insurance, some will for the first time have the chance to join forces and buy cheaper insurance – depending on which state they’re in.
New rules that began going into effect last month allow sole proprietors and other business owners without employees to form what are known as association health plans, or AHPs. But while the Trump administration has touted the rules as a breakthrough, many owners will be disappointed to learn their states’ insurance laws will limit their ability to join the plans.
The rules issued by the Labor Department allow sole proprietors and partners to buy coverage that wasn’t available to them under the Affordable Care Act. The rules also permit the plans to offer insurance that doesn’t meet the health law’s requirements for basic coverage.
The catch for many businesses is the rules, unlike many other federal laws and regulations, don’t supersede state requirements for health insurance, and states that heavily regulate insurance are expected to make it harder, if not impossible, for association health plans to be formed.
Moreover, there are concerns that new association health plans could revive a problem from the past – plans that become insolvent or are scams.