Health care for small business owners is expensive. If you have a small business, then you lack the discounts that large companies with hundreds of employees can acquire by bargaining. So how does this new bill from the Labor Department help? It is changing the way that AHP (Association Health Plans) are regulated. Currently the AHP are heavily regulated by the state, by shifting some of the oversight on regulation to the federal government, the plans become easier to sell.
The pros are small business owners can pool their employees together to create larger bargaining power. This way they are on par with larger corporations. This also creates more market competition which is great for consumers as the price should come down. The cons are with regulation pushed to the federal government AHP have insolvency problems without defined regulatory authority. Meaning your plan and coverage could disappear at any moment if they become insolvent. In addition, while the AHP will help to get discounts that exceed what you are paying now, small business still cannot compete with the rates that large corporations can get.
Currently small business health care is so astronomically high that these policies may be welcomed. Keep in mind, before we all get to excited, that there are risks involved in buying from an ASP.
The Pathways Team