Washington Farm Bureau (WFB) offers its members health insurance through an association health plan (AHP) – the only state Farm Bureau currently doing so.
“In the early 2000s, members were really struggling to find insurance providers in rural areas,” said David Pearson, WFB’s marketing and member benefits AHP consultant. “What was available was expensive, and it wasn’t very good coverage.”
AHPs allow small businesses with two or more employees to band together to be rated as a large group. Doing so spreads the risk across a larger group, which reduces administrative costs and strengthens negotiating power with providers and ultimately lowers the cost of health insurance, said American Farm Bureau Federation’s R.J. Karney.
Washington Health Care Trust, formed in 2004, is governed by a five-member board of trustees, Pearson said. The trust has no employees. Instead, it contracts with entities to provide insurance, sales support, legal counsel and third-party administration, among other things. WFB provides marketing services.
Their carrier, Premera Blue Cross, provides insurance and offers 52 different plans. Delta Dental offers four dental plans. VSP Service Plan provides vision and LifeMap covers life insurance, accidental death and dismemberment. Pearson said the third-party administrator, BSI, “is really the glue that holds everything together.”
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At its peak in 2012, Pearson, said the plan insured 917 employers, 7,204 employees and 12,325 lives. The aggregate annual premium exceeded $47 million. The Affordable Care Act (ACA) came with restrictions.
“We were no longer able to sell into rural communities, like the tire store, the funeral home,” Pearson said.
Participation dropped, but has since bounced back some, he said. As of February, the plan insured 246 employers, 2,740 employees and 4,313 lives.
Karney, AFBF’s director of congressional relations, said many state Farm Bureaus stopped offering associate health plans after 2011 when the Centers of Medicare and Medicaid issued a guidance document based on the ACA that regulated AHPs by small group insurance requirements.
“This essentially removed the advantages as a cost savings they provide,” Karney said.
Last year, President Donald Trump signed an executive order that called for expanded access to AHPs, among other things. In January, the U.S. Department of Labor (DOL) issued a proposed rule that would:
- Allow employers to form a Small Business Health Plan on the basis of geography or industry. A plan could serve employers in a state, city, county or multistate metro area, or it could serve all the businesses in a particular industry nationwide.
- Allow sole proprietors to join Small Business Health Plans, clearing a path to access health insurance for millions of uninsured Americans who are sole proprietors or the family of sole proprietors.
AFBF submitted comments on the proposal, supporting creation of AHPs and the ability of plans to be offered across state lines.
Michigan Farm Bureau plans to explore an AHP depending on the outcome of the proposed rule.
“We’re in the same boat,” said Tom Nugent, director of Michigan Farm Bureau’s field operations. “We’ve been through a lot of different alternatives in health care, and we’re looking at what might come in the future.”