Courts have stymied a push by the Trump administration to make it easier for employers to band together and offer association health plans, yet there are signs the coverage is growing nonetheless.
This fall, trade groups in Minnesota for credit unions, homebuilders and nonprofits are pushing new health plans to their members, saying the new structure could provide long-term stability, savings and choice in health insurance options.
In 2018, the Trump administration proposed rules for association health plans that generated a lot of interest in the coverage among trade groups, said Paul Crowley, a senior vice president at Medica, a health insurer based in Minnetonka. The interest persisted for some, even when a judge earlier this year set aside those new rules.
“They just pivoted and said: ‘Yeah, we can do something here,’ ” Crowley said.
The Minnesota Credit Union Network and Minnesota Council of Nonprofits are working with Medica to launch new association health plans in January. Housing First Minnesota, the trade group for homebuilders, is launching a health plan in conjunction with Eagan-based Blue Cross and Blue Shield of Minnesota.
Homebuilders have long sought a way to buy as a group quality health insurance at a good price, said David Siegel, the executive director of Housing First Minnesota. For many, it’s tough to do the research that’s required to offer the benefit, Seigel added.
“In this era of low unemployment and a workforce shortage in construction, health insurance benefits have become even more important,” Siegel said in a statement to the Star Tribune. “It was important to us as an organization to provide our members and the employees in this great industry with better access to health insurance.”
Association health plans are a particular type of health insurance that’s been around for decades but has been limited to business and employer trade associations where there is a commonality of interest among members, said Katie Keith of the Center on Health Insurance Reforms at Georgetown University. Some have worked well, Keith said, as a way for small employers to gain the bargaining power of a larger group.
Instances of fraud with some association health plans in the 1990s and 2000s prompted Congress to impose stricter rules on the coverage. So, when the Trump administration proposed rules that seemed to push in the other direction — expanding the ways in which employers could band together and creating a chance for plans that cross state lines — many raised consumer-protection concerns, Keith said.
Earlier this year, a federal judge set aside the new rules. Keith said she was a bit surprised to hear about the new association health plans in Minnesota and speculated there could be a “welcome mat” effect at play: Interest in the Trump proposal might have created awareness about how plans could be launched under the old rules.
Starting in 2014, the federal Affordable Care Act (ACA) brought new rules for setting premiums in the small-group market, where small employers with two to 50 workers buy coverage. In Minnesota, the change meant that relatively healthy small employers no longer received premium discounts, while relatively unhealthy groups saw premium savings.
Crowley, the Medica official, said association health plans could give some healthy small groups “a better rate than what they can get off of small-group, ACA-filed rates,” he said, but that’s not the only thing employers will consider.
With association health plans, employers must be members of the trade group, Cowley pointed out. Healthy small groups have other ways to try to find premium savings, Crowley added, pointing to newer types of “self-insured” health plans that have been sold by several carriers since 2014.
“We’re not planning on this drastically changing the risk pool or even significantly changing the risk pool for small businesses,” Crowley said of the association health plans.
At the Minnesota Council of Nonprofits, there’s long been an interest in offering an association health plan, but the trade group in the last few years has been pleased to find more interest among insurers and brokers in developing the coverage option, said Jon Pratt, the group’s executive director.
Pratt said he thought one factor could be increased competition in the local health insurance market, including more products from Minnetonka-based UnitedHealthcare and a joint venture between the national insurer Aetna and the Minneapolis-based Allina Health System.
Survey results suggest that 50 nonprofit employers with somewhere between 750 and 1,100 employees might sign up, the trade group says.
The association health plan at the Minnesota Council of Nonprofits will operate according to longstanding rules, but the Trump administration’s push for change “was helpful just to get people’s attention,” Pratt said.
The Minnesota Credit Union Network had a working group looking at the possibility of an association health plan before the Trump administration issued the proposed rules, said Mark Cummins, the group’s president and chief executive.
Cummins said he thinks the new health plan will help credit unions better attract and retain employees, but he said offering it is a big deal for the trade group.
“We’re not in the business of health insurance overall,” Cummins said. “So, it’s a steep learning curve.”
As of last week, eight credit unions with more than 250 employees had committed to participating, the trade group said, adding that the goal is to cover about 500 employees total.
“This is really a long-term goal of ours,” Cummins said. “It’s not just the short-term of pricing received today, but it’s corralling the escalation in costs over time.”