Association Health Plans: Individual Health Plan Alternative?
AHPs are looked to by many people as an alternative health insurance to individual health insurance. It’s bought when someone doesn’t qualify for insurance through a job-based group coverage. They are an alternative to individual health plans and they look like a good idea. Being a member of an association puts you in a group which means that lower premiums can be negotiated than are readily available to individuals. Association health plans are not group plans though and as such do not have to abide by or respect the consumer’s rights that would normally apply.
AHP is a health insurance coverage plan offered to the members of the association. It has to be in existence for something other than the selling of insurance. They offer discounts and benefits to the members, such as the National Association for the Self-Employed.
Small business owners tend to be the prime targets for the AHP field. It allows a small business with minimal employees to offer insurance coverage plans at usually cheaper premiums than individual health insurance plans. Unfortunately these plans don’t offer the same coverage and safety that more conventional insurers offer and not knowing the ins and outs of the plan can cause you financial decimation.
You, as a consumer, should be aware that association health plans are not the same as group health or individual health insurance plans. Group plans have restrictions and regulations that make sure that you’re protected and that you play the same premium from year to year. Group plans are also mandated by law to include coverage for various health problems and diseases. AHP’s are not required to do so. They can change their premium rates from member to member as well as raise their rates from year to year to where a consumer couldn’t possibly afford the plan. Associated health plans are also not subjected to regulation by states that mandate certain coverage.
The downside to all the regulations is that premiums will be higher and that is where the advantage of the associated health plans come into play. Not all are bad and many consumers enjoy easy qualifications and less premiums. Just make sure you know what you’re getting yourself into (or keeping yourself away from) before signing. Quality insurance can, in fact, come out of an AHP despite the fact that there many fraudulent ones out there.
Prior to getting involved in an AHP ask several questions of them. When can the premiums increase and by how much? How much money does the plan have available to pay off claims? Any law suits filed against them? Is there COBRA coverage available to the members?
No matter what you choose ask questions and get informed.