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Association health plans: What small businesses need to know

AHPs allow some small businesses to be able to offer health plans with lower premiums than they could previously afford.

By Sally Poblete | Updated on July 09, 2018
Health Care Binders The new rules allow carriers to introduce AHPs as early as September 2018, so we may see plans on the market as soon as this fall and early next year. (Photo: Shutterstock)

The U.S. Department of Labor recently announced regulations that will allow for the expansion of Association Health Plans (AHPs). But what exactly are AHPs, and what do they mean for small businesses?

Essentially, AHPs allow small businesses to band together to purchase health insurance. The definition of a small business varies by state, with most states capping it at 50 employees, and 100 in California, Colorado, New York, and Vermont. While we have seen efforts to promote AHPs since the 1980s, the new rules are unique in that they also allow sole proprietors – or someone who owns an unincorporated business by themselves – to join the associations. Previously, sole proprietors could only buy individual coverage, but now they have the option of participating in the association plans.

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