Alternative Funding Approaches

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Policy Examples

  • An (AHP) is an arrangement in which health coverage is sold to employer members of an association, such as a professional or trade association. An AHP is a single plan (MEWA) managed by an employer and is generally more structured than a MEWA. A MEWA is an arrangement of two or more employers or self-employed individuals established to offer health coverage. source & source
  • Georgia established the FARM plan – a MEWA that allows employers to purchase health plans not offered to individuals on the Obamacare healthcare exchange. SOURCE & SOURCE
  • In 2018, new regulation was introduced to allow self-employed individuals without employees to be eligible to purchase coverage from AHPs as a small business. source
  • AHPs that enroll individuals or small group plans are required to follow Affordable Care Act (ACA) regulations such as covering essential health benefits. However, under limited exception, if an AHP covering small employers is considered a single large group plan it is regulated under ERISA and not subject to state laws. source
  • North Carolina lawmakers have passed legislation that would allow sole proprietors and small businesses to join association health plans largely mirroring federal guidelines issued last year. SOURCE

Outcome Evidence

  • Regional associations launched 71 percent of the new AHPs in 2018. The most common sponsors for regional associations were chambers of commerce, which sponsored four out of five regional associations. source
  • Among new AHPs in 2019, 86 percent are insured by a third party as opposed to being self-funded. source
  • In 2018, Land O’Lakes was the first employer to announce a self-insured multi-state group health plan under the new 2019 AHP regulations. The Land O'Lakes Cooperative Farmer Health Plan will offer several Affordable Care Act-compliant options that cover the 10 essential health benefits, providing "broad network coverage" that are more affordable than plans in the individual market. source

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