What Are Association Health Plans – and How You Can Add Them to Your Portfolio

Association Health Plans

Association Health Plans (AHPs) have been around in various forms for decades. They began as part of an effort by business and professional associations to help them attract and retain new members. AHPs offered individuals the opportunity to access health insurance through of a “commonality of interests” – sharing a common industry or profession. However, the rules under which AHPs operate have changed over time.

AHPs in the 1990s

During the 1990s, AHPs were promoted as a way to make it easier for small employers to band together to create a larger risk pool to purchase health insurance. The goal was to reduce costs for employers and employees. The underlying theory was that with more people paying into the health plan, the costs would be more reasonable for everyone involved – employers and employees.

Unfortunately, many AHPs were not well managed, forcing them into bankruptcy. Set up as multiple employer welfare arrangement (MEWA) health plans, more than 600 of these plans, which operated in nearly every state, failed to comply with state laws. The result was hundreds of thousands of participants with unpaid medical claims totaling millions of dollars.

Changing AHP Rules

The Affordable Care Act (ACA) brought about new regulations for and interest in AHPs. The ACA allowed AHPs to qualify for Minimum Essential Coverage, while permitting them to follow Large Group rules and avoid Essential Health Benefits and metal tier level requirements for Small Group.

In 2018, the Trump administration asked the Department of Labor to expand AHP rules further; however, the final rules did not go as far as some advocates wanted. AHPs still have limits on who can join a plan, and AHPs are still subject to some state and federal regulation.

Availability Differs

As of 2022, about a dozen states strictly prohibit AHPs (or certain types of AHPs).

California does not permit Group Health coverage to be sold to individual subscribers directly or indirectly through any arrangement. Large Group coverage may not be sold to small businesses through MEWAs, AHPs, voluntary employees’ beneficiary associations (VEBAs), or any similar arrangement.

Qualified Nevada businesses do have access to AHPs. If you’re a broker in Nevada or California who is licensed to sell in Nevada, you may be interested in knowing about the AHP options available.

Nevada small businesses engaged in the hotel/lodging, construction, optometry, dental, and medical fields may be able to save on group insurance benefits for their employees. Coverage is available to small business clients in select locations across Nevada, including:

  • Carson City
  • Clark County
  • Douglas County
  • Lyon County
  • Nye County
  • Storey County
  • Washoe Country

Employers must be affiliated with one of the following trade groups to qualify:

  • California Automotive Wholesalers’ Association
  • Clark County Bar Association
  • Nevada Hotel & Lodging Association
  • Nevada Builders Alliance
  • Nevada Optometric Association
  • Northern Nevada Dental Society
  • Reno + Sparks Chamber of Commerce
  • Southern Nevada Dental Society
  • Washoe County Bar Association
  • Washoe County Medical Society

Large Group Benefits for Small Groups

Association Health Plan coverage is offered in Nevada through Prominence Health Plan – giving small business groups access to Large Group benefits:

  • Multiple plan options, including Health Savings Account-qualified coverage
  • Affordable monthly premiums
  • Multiple coinsurance options: 10%, 20%, 30%
  • Copays for widely used benefits like Primary Care Physician visits, specialists, and lab services
  • Statewide HMO open access network
  • National Cigna PPO network access

If you are interested in adding AHP coverage to your portfolio, and offering to it your small business clients in Nevada, contact Word & Brown Regional Sales Manager Ken LaRovere or Senior Inside Sales Representative Mona Hannah.

If you are not already working with us, you can register using our online form.

How Much Can You Earn as an Insurance Broker?

Find out what you can be earning as an insurance agent in our handy, up-to-date salary guide. Produced by our in-house experts, this resource is bound to help you in advancing your career.

Word & Brown Salary Guide