FAQs

An Association Health Plan (AHP) allows small employers with common business interests to band together to enroll themselves and their employees into large employer health plan.  AHPs:

• Provide greater negotiating power with insurance providers;
• Reduce administrative burden for small businesses; and
• Provide access to health coverage typically only available to large employers.

The requirements to enroll in an Association Health Plan (AHP) depend on the eligibility requirements of the sponsoring association.  Generally, you must be a member, in good standing, with the sponsoring association and pay your annual or monthly association dues.  However, not all members of an association can participate in the AHP.  Regulations do not allow sole proprietors to be part of an AHP and insurers will usually not allow large employers (which can negotiate directly with insurers) to participate.  There may be other requirements such as revenue tests, licensing and restrictions based on NAIC codes.

Plan years for most insurers typically match the calendar year.  This means that your deductibles, out-of-pocket maximums and other accumulators will start over every January 1 (though this is not always the case).  The Policy Year describes when the renewal date is, which is when rates and plan benefits most often change, and when open enrollment occurs.  Most associations have plan years for all their participating employers on the same date and is usually the start of a quarter.  However, Asset Solutions Groups specializes in creating health plans with insurers that allow groups to enroll and renew throughout the year.  This minimizes the rush of enrollment at one particular time of the year and allows the association to experience more even enrollment.

Most Association Health Plans (AHPs) offer between three and six plans to their membership.  Asset Solutions Group works with carriers to design multiple plan options to your membership.  In some cases, the plan offering mimic those plan designs available in the small group market (but at discounted rates) and in some cases, the plan offerings mimic large group plans available to unions and other large employers.  Our unique experience with insurers allows us to assist the insurer in offering a high number of plans in an efficient manner, maximizing the options available to the broker sales force and your membership.  In fact, we have one association that offers 36 different PPO and HMO plan designs to their membership!

Absolutely not!  In fact, we encourage you to work with your broker to determine the best association plan for you; your broker is your benefits expert and will be able to focus on your needs.  If your broker is unfamiliar with the association, we will work with them to understand everything they need to know to connect you to the right plan option.  We work with the association to ensure there are no unnecessary requirements for brokers to help you get the right plan.  While some competing associations require the broker be a member of their association (with high membership fees) or simply don’t allow other brokers to sell their association plan to their membership, our associations allow any broker to sell our association plans, as long as they are appointed by the insurer.

Association Health Plans use the bargaining power of hundreds of employers and thousands of employees in low risk industries to negotiate better rates with insurers in the large group market (employers with more than 50 employees), which is regulated differently than the small group market (2-50 employees).  By banding together under the Multiple Employer Welfare Arrangement (MEWA) rules in the Employee Retirement Income Security Act of 1974 (ERISA), small employer members of associations can enjoy the large employer benefits.

Yes and no.  MEWA and ERISA rules are extremely complicated… unless you have the right expertise in your corner.  Asset Solutions Group provides decades of association health plan expertise, industry insider experience, access to legal and accounting teams, product set up information, filing deadlines, communication to your membership, outreach to market brokers and more.  We’ll take on the complication and uncomplicate it for you!

Association Health Plans (AHPs) that do not follow MEWA and ERISA rules can face a number of legal issues.  First, an association that is no longer determined to be a bona fide association can be found to be offering insurance to its membership illegally resulting in termination of your coverage.  There are IRS and DOL filing requirements that may fall on the small employer if the association loses its status as an association which can result in fines to the membership.  Additionally, the association may have to pay fines that would be passed onto its membership.

It is difficult for an outsider to tell whether an association is compliant with the rules.  However, here are a few questions you can ask your association.  If they dance around the answer or can’t provide the documentation, chances are that they are not a bona fide association health plan.

• How long has your association sponsored its MEWA plans?
• Is your association’s MEWA plan compliant with ERISA?
• Has your association requested an opinion letter from the Department of Labor to confirm its status as a bona fide association?
• Did your MEWA file the required initial or annual Form M1 with DOL advising of its formation and, if so, can I get a copy?
• Is your association the named fiduciary of the MEWA and is it covered by a fiduciary liability insurance policy?
• Does your association provide a summary plan description and, if so, can I get a copy?
• Did your MEWA file a Form 5500 Annual Report and, if so, can I get a copy?
• Does your MEWA have a trust agreement and, if so, can I get a copy?
• Did the association’s MEWA file a tax return and, if so, can I get a copy?