The Department of Labor (DOL) has made it easier for entrepreneurs and small business owners to get health insurance for themselves and their employees. How? By changing the rules on who can buy an Association Health Plan (AHP).
An Association Health Plan is health insurance purchased by a group (or association) because the individuals in the group do not have the negotiating power or the money to get a good health insurance rate. The association pretty much looks like a single large employer to the insurance company, so the insurance purchased is treated like a large group health plan – which means lower rates and better options.
Under the new DOL ruling, small businesses can form associations based on their geography or industry. This also allows sole proprietors to form associations in order to get better health insurance for themselves and their families (even if they do not have any employees yet).
The DOL believes that by expanding who can form an association to purchase an Association Health Plan, small businesses will be able to lower their health care costs and increase their choices. Before expanding the definition of association, many small businesses could not afford to provide health insurance to their employees. The DOL believes that this ruling will help thousands of un-insured people find affordable healthcare options.