Small Business Health Plans

Posted by BAS - 01 February, 2018

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The United States Department of Labor has expanded the ability for small businesses to group together to purchase health coverage. Many employees working for small businesses do not have employer-sponsored health coverage. Historically, small businesses and sole proprietors have had few choices when it came to affordable health coverage.

Under a new law, small employers can work with one another to form “Small Business Health Plans,” or “Association Health Plans.” Under these plans, employers will be able to join together as a single group to purchase insurance in the large group market. With a larger pool of lives, insurers may offer more cost-effective options. Similarly, employers will be able to reduce administrative costs by grouping their purchases.

The law would allow employers to form Small Business Health Plans on the basis of geography or industry. The plans could serve employers in a state, city, county or multi-state metropolitan area, or it could serve all businesses in a particular industry nation-wide. The rule would also allow sole proprietors to join Small Business Health Plans.

Smaller employers may wish to look into the options offered by Association Health Plans when considering the health coverage options available to their employees.

Topics: HR & Benefits Compliance


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