Is an AHP right for your company? 

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Is an AHP right for your company?

by Charles Pareigis (October 23, 2018)


Business Man at Computer

Did you know that 73% of employees believe their employer is responsible for the health and well-being of their employees? And…that 82% of employers agree? 1 Couple that with 60% of employees saying that health and well-being benefits are important to driving job loyalty and 75% of employees indicating they’d likely accept a new job if they were offered the ability to customize their benefits1, and the picture becomes quite clear.


Benefits are crucial to job loyalty, retention and recruitment.


Often, however, small businesses struggle to provide a robust health and wellness benefits package to their employees due to the financial strain. But, there is something on the horizon that could pave the way for small employers to enhance their benefit offering and stand out from their competition: Association health plans (AHP).


What is an AHP?


Beginning Sept. 1, 2018, small businesses will be eligible to join together with other small businesses based on industry or geography to purchase large group health plans as one entity. 


The idea is that small businesses can benefit from a 10% to 30% savings, on average, when taking advantage of group purchasing – and receive those previously hard-to-attain big company benefits.


What type of insurance is available through an AHP?


The AHP can be formed three ways:

  1. Fully insured medical
  • Key benefit: Easiest plan to administer and communicate to employees.
  • Capital reserves: No initial capital reserves are required.
  • Risk ownership: The insurer takes on all risk.
  1. Self-insured medical
  • Key benefit: Offers group-wide savings if the AHP group experiences positive claims.
  • Capital reserves: The AHP funds some initial capital or financial reserves.
  • Risk ownership: The AHP assumes the financial risk.
  1. Hybrid medical (sometimes called a minimum premium program)
  • Key benefit: Mitigates risk and allows for dividends, depending on performance.
  • Capital reserves: No initial capital reserves are required.
  • Risk ownership: The insurer and AHP share the financial risk.


In a recent Employee Benefits News survey, more than 84% of small businesses expressed a desire to offer their own plans.


Ready to learn how you could use an AHP to your company’s advantage? Reach out today, and we’d be happy to talk through your options.

1MetLife – Work Redefined: A New Age of Benefits