In an effort to help its members with ever-increasing health insurance costs, MBI is working with industry partners to come forth with the creation of its own Association Healthcare Plan (AHP) called “MBI Plus”. At a recent meeting, the MBI Board of Directors moved forth with this concept as a way to provide MBI members another health plan option to consider this coming fall and winter as individuals firms determine insurance renewals for 2019.
MBI Board Chairman Christopher Wheeler stated, “The ultimate goal with MBI Plus is to provide eligible member-firms with simply another option on health insurance premiums. This aspect of business is becoming more expensive to manage and it is our belief that MBI should – on behalf of its members – take advantage of health care reforms at the federal and state levels and create a plan option for the Iowa commercial construction industry.”
Federal and State Changes Lead to AHP Options
With health care costs skyrocketing, many small employers are faced with the option of being caught in a statewide community rating structure, with escalating costs or having to drop coverage altogether.
The discussion surrounding the creation an AHP began last year. Since then, rule changes adopted at the federal level broadened the availability of less-regulated health insurance coverage to more small employers. The rules do so by letting many more small firms band together under AHPs. These plans would be exempt from many of the Affordable Care Act’s rules on what benefits have to be mandated.
In response to an executive order from President Trump on October 12, 2017 titled, “Promoting Healthcare Choice and Competition Across the United States” (Executive Order 13813), the Department of Labor issued a final regulation under Title 1 of the Employee Retirement Income Security Act (ERISA) on June 19th of this year. This regulation established additional criteria under ERISA that in effect allows for AHPs to proliferate again.
According to the Department of Labor, AHPs are an innovative option for expanding access to employer-sponsored coverage (especially for small businesses). Through AHPs, employers band together to purchase health coverage. By participating in AHPs employees of small and mid-sized employers and working owners are able to obtain coverage that is not subject to the regulatory complexity and burden that currently characterizes the market for individual and small group health coverage. Therefore, these employers can enjoy flexibility with respect to benefit package design comparable to that enjoyed by large employers. AHPs may also help reduce the cost of health coverage to participating employer members by giving groups of employers increase bargaining power vis-à-vis hospitals, doctors, and pharmacy benefit providers, and creating new economies of scale, administrative efficiencies and a more efficient allocation of plan responsibilities.
The State of Iowa then jumped into action this past spring as the Legislature passed and the Governor signed S.F. 2349, which provides a significant opportunity to expand the availability of affordable health plans in Iowa by authorizing AHPs.
Company-sponsored benefits are huge when it comes to employee retention and many MBI members have shared instances in which potential employees are attracted to a very competitive benefits program. As MBI becomes more active in workforce development and recruitment, the advent of MBI Plus creates another means by which members can be competitive in not only attracting workers, but retaining their existing workforce.
MBI is excited about the offerings of this new AHP program. As insurance and premium renewals for January 1, 2019 approach, MBI will continue to provide helpful information and materials that will further detail the various aspects of this new program.