Endorsements and editorials are made solely by the ownership of this newspaper. As is the case at most newspapers across the nation, The Spokesman-Review newsroom and its editors are not a part of this endorsement process. (Learn more.)

Editorial: Decisions on association health insurance plans should be flexible

Wed., Nov. 5, 2014

Insurance Commissioner Mike Kreidler last week approved a health insurance plan offered by the Associated General Contractors of Washington, good news for the 500,000-odd employees in the state who get their insurance through similar plans.

Preliminary interpretations of the Affordable Care Act had put association health plans in peril. Small employers who benefited from the lower premiums possible when they can pool their purchasing were facing rate increases if they had to buy their own plans.

With the ACA enrollment period for small businesses set to begin Nov. 15, employers need to know soon whether they can stay with their association plan. If not, they will be on their own, or their employees will be on their own.

That may turn out to be cheaper, but a lot more complicated.

The OK given the contractors at least gives them hope, but the commissioner’s office has a lot of work to do: Another 60-plus associations are under review.

To qualify, an association must be organized for something more than pool insurance buying, and it must have a common purpose. The Associated General Contractors is an obvious example. The Washington Education Association, whose members constitute the largest association buyer, is another.

Some associations with a diverse membership may have to restructure to qualify, and some may not qualify at all.

Associated Industries in Spokane, for example, has sorted its members into five different trusts with common purposes – technology, for one. But a few members – not-for-profits – are probably out of luck. Associated’s plan covers 18,000 people.

Entire associations may fail the review, which could reignite a pre-ACA dispute over a Kreidler ruling that associations had to treat all member companies equally even if some had a history of higher insurance claims. The associations won, but by then the ACA had reset the criteria.

Businesses with fewer than 100 employees don’t have to provide insurance but get tax breaks for doing so. In Washington, 12 insurers are selling 300 different policies that comply with ACA coverage requirements, policies that may be better than those employers make available now.

If businesses drop their plans, employees can buy their own, with subsidies calculated according to income.

The U.S. reliance on employer-provided health insurance is an anomaly. Most countries provide health insurance directly or indirectly, with no employer role. Employees who participate in company plans are probably comfortable doing so, if only because they avoid the hassle of buying insurance themselves.

Association plans give employers that same kind of comfort. Buying insurance is not the first order of business for an owner trying to get products out the door or customers in the door. The more associations the insurance commissioner finds that comply with the law, the better. So far, none has been rejected.

Kreidler showed some flexibility last year when he was determining which companies and policies were suitable for sale in Washington. He should take th same approach as he reviews association plans.