Opinion: Invalidating association health plans would devastate Michigan’s small businesses
Small business owners need access to health insurance for themselves, their employees and their families. But doing so affordably has long been nearly impossible to achieve. One of the most frustrating tasks for small business owners and sole proprietors is watching their health insurance premium costs escalate and not being able to anything about it.
I have been working in employee benefits for more than 35 years. Each year, small business owners and sole proprietors ask me, “How can we band together with other small businesses and sole proprietors in our community to group-purchase our health insurance?” Group-purchasing does two things: gives small businesses/sole proprietors options they didn’t have before, while giving them additional skin in the game.
This year, the Small Business Association of Michigan set out to fix this problem for our members. SBAM partnered with MichBusiness to form an association health plan, which we called TranscendAHP. TranscendAHP allows small businesses and sole proprietors throughout Michigan to band together to purchase health insurance in the same manner that large employers do.
To say TranscendAHP has been successful is an understatement. Virtually every small business and sole proprietor who joined was able to find a health insurance option that was 20-30% more affordable than the health insurance plan they had last year.
Many of these small businesses now have a health plan with a lower deductible that covers more health benefits and services, yet still costs less than what they were previously paying. And some small businesses and sole proprietors are now covered by health insurance for the first time.
The health plans offered by TranscendAHP come from Blue Cross Blue Shield of Michigan and Blue Care Network and are all fully insured. The plans also voluntarily cover all 10 of the Affordable Care Act’s essential health benefits, and instead of covering pediatric dental and vision services through the insurance contract itself, we offer coverage for these services through stand-alone products.
Transcend is the largest association health plan of its type in the country with more than 440 small businesses and 215 sole proprietors obtaining coverage. These plans do not cut any corners or leave anything out. Transcend simply gave small businesses and sole proprietors the opportunity to buy the same plans that large businesses offer to their employees — through group-purchasing.
Unfortunately, 11 states (California, Delaware, Kentucky, Massachusetts, Maryland, New Jersey, New York, Pennsylvania, Oregon, Virginia, Washington) and the District of Columbia have filed a lawsuit to invalidate associated health plans like TranscendAHP.
Oral arguments in the Circuit Court of Appeals in D.C. were held this week, and there is a lot at stake.
Without TranscendAHP’s comprehensive and affordable health coverage, Michigan’s small businesses will face a harsh reality: forgo the 20-30% savings in insurance premiums — and in some cases deal with a 60% premium increase — or be forced to go without coverage. This is a result no one should want.
Invalidating association health plans would be devastating for Michigan’s small businesses and sole proprietors. Ruling against them would be bad public policy and in poor conscience. As oral arguments take place in Washington, D.C., we urge the court to take a close look at the success of TranscendAHP in Michigan when making a decision.
Scott Lyon is senior vice president of the Small Business Association of Michigan.