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AHPs offer key benefits to small employers and their employees. Under federal
regulation, AHPs will provide small businesses the opportunity to band together
through trade and professional associations to purchase affordable health
benefits through greater bargaining power, economies of scale, and
administrative efficiencies. AHPs will level the playing field and give small
employers the same advantages as larger employers and unions.
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Lower Costs
The Congressional Budget Office (CBO) has estimated that small businesses obtaining
insurance through AHPs will enjoy premium savings of 13 percent on average.
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Increased Coverage
CBO estimates that the number of insured small firm
employees and dependents most likely will increase by 330,000 (1.3 percent),
but could increase by as many as 2 million (8.3 percent).
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No Cherry-Picking
The House-passed legislation includes numerous
provisions designed to ensure that AHPs pool together a diverse range of
health risks. These provisions will prevent AHPs from “cherry picking” the
healthiest workers.
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Only bona fide associations, which are in existence for three years
for purposes other than providing health insurance, can operate an AHP.
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A self-insured AHP must represent a broad cross-section of trades and
businesses or industries.
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AHPs must offer coverage only to employers and individuals with
specified, meaningful connections to the association. AHPs must offer all
available options to all employers and individuals in the association.
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The legislation makes clear that AHPs will have to comply with the
Health Insurance Portability and Accountability Act (HIPAA), prohibiting
group health plans from excluding high-risk individuals with high claims
experience.
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The legislation limits AHPs’ ability to vary the premiums of lower
and higher-cost employers.
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DOL Oversight
The Department will allocate the resources necessary to
effectively administer the AHP certification and oversight responsibilities,
as well as provide effective, efficient and timely AHP regulation.
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