Association Health Plans
These plans allow the same or similar types of employers to come together to purchase health plans for their employees. Some of the industries that commonly offer these plans include:
Contactors – Schools – Governments – Builders – Attorneys – Manufacturing – And more
What are AHPs, do they save money, are there downsides?
What are AHPs?
This plan, under the right circumstances, saves premium dollars while potentially offering access to a broader provider network. It combines the purchasing power of several similar businesses by combining into one plan that fits all their employees.
How do AHPs save on premiums?
When a group of employers come together to form 1 group plan, they have a great number of employees to spread out the risk then if they were alone. This helps control premium increases if you have a high claim year that is not normal.
The plan can exclude businesses from enrolling who may not meet its eligibility requirements. This is a strategy to protect the risk pool.
The most common problems
AHPs work great while the premiums that can be given to employers are lower than what employers can get in other places.
As low claim groups leave the AHP premiums need to increase to compensate for losing the premiums that the low claim groups brought to the association.
This issue can happen in the first renewal cycle of a AHP, or could not happen for 10+ years or longer.
Explore alternatives
Dattilo Consulting, Inc. understands that every renewal requires a full analysis of your current benefits and what else is out there in the marketplace. AHP’s are just one of the many options that are given to employers and just because they were the best option in years past, does not mean they are the right option going forward.