WA: Premera association health plan approved, largest in state
OLYMPIA, Wash. – The Office of the Insurance Commissioner has approved a Premera association health plan (AHP) for the Washington Education Association (WEA). Approximately 113,000 people are enrolled in the WEA’s association health plan making it the largest in the state with over 22 percent of the AHP market.
Association health plans are health plans sold by insurers to a large professional or trade group. In the past, small employers within an association had the benefit of buying large group insurance for their employees. Until recent federal regulation, association health plans were exempt from having to meet key consumer protections and from the rating and underwriting standards of the individual or small-employer market.
“Associations offer a lot of benefits to their members, and to their communities. We’ve worked very hard to reach out to as many associations and insurers as possible for the last several years to help them understand the new federal law,” said Insurance Commissioner Mike Kreidler. “We understand many of their members rely on the insurance that associations provide. We’ve offered guidance and advice on what steps associations need to take to comply with the new federal law.”
Associations can still offer health insurance to their members, but new federal guidelines mean that they cannot offer large group coverage to their small employer members. An exception exists for associations that meet the definition of an employer under federal law. Generally, an association can be considered an employer if it has a genuine organizational relationship unrelated to providing benefits.
Prior to this federal regulation, some small employers who joined an association for the benefit of affordable health insurance saw their rates increase significantly when one of their employees became sick. If they could not afford the increase, they were forced to seek coverage in the small employer market, where premiums were historically higher.
“Associations can still offer their members health insurance, but they must play by a common set of rules,” said Kreidler.