Association Health Plans (AHPs) are group health plans that allow groups of small businesses, individuals, non-profit associations, and other linked affinity groups to band together to purchase benefits for members.
By acting together, members of associations can take advantage of economies of scale and increased purchasing power to get benefits at prices they could not have obtained by acting alone.
These plans are typically organized by associations based on common professions, industries, or geographic regions. AHPs enable smaller companies and self-employed individuals to access the large group insurance market, which often offers more favorable terms due to the larger pool of enrollees that can spread out the risk.
How Association Health Plans Work
Formation and Membership
AHPs are formed through associations that may consist of small businesses, self-employed individuals, and sometimes even individuals without any business affiliation.
These associations must be bona fide, with a formal organizational structure and defined membership criteria.
Generally, AHPs operate under large group health plan rules, which subject them to fewer regulations than plans in the small group or individual markets under the Affordable Care Act (ACA)
Regulatory Framework
Historically, AHPs have been regulated both by state laws and federal guidelines under the Employee Retirement Income Security Act of 1974 (ERISA). Recent changes, as of 2018, have expanded the definition of “employer” under ERISA to include working owners without employees, such as sole proprietors and other self-employed individuals. This expansion allows these individuals to join AHPs.
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Benefits of Association Plans
One of the primary advantages of AHPs is the potential for lower insurance premiums compared to individual market plans.
By pooling a larger number of enrollees, AHPs can negotiate better rates with insurers and healthcare providers. Additionally, they can design their health plans with more flexibility in terms of coverage options and benefits.
For example, AHPs are not required to cover the essential health benefits that ACA-compliant plans must provide. This allows associations much more latitude in benefit design: many members may be looking for lower cost options, such as health sharing plans rather than traditional health insurance plans.
HSA for America is the leading health sharing benefits broker nationwide.
UPDATE: Your members can now combine a low-cost health sharing plan with the tax advantages of health savings accounts!
NEW: At Last, You Can Combine Health Sharing With HSAs! Here’s How..
How Offering an Association Benefit Can Generate a Stream of Income for Your Organization
It’s possible to turn your association health plan into a source of revenue for your organization.
At HSA for America, we have revenue-sharing programs available that allow you to receive a stream of income from your members’ plan contributions to your association.
You can use this ongoing revenue for any purpose – for special projects and events, to hire staff, to provide even more benefits for association members, or to commit to your association’s reserve or general funds.
This allows your organization to benefit from providing a valuable health plan for plan members.
Note: Revenue sharing is not available with all plans. For specific information, contact an HSA for America Personal Benefits Manager.
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Get Started Today
To learn more about the available health plans, including health sharing plans available to associations and nonprofits, make an appointment with a Personal Benefits Manager today.
Our expert PBMs can help you identify your options and find the benefit or combination of benefits that will make you a hit with your members.
For Further Reading – Maximize the Power of Your HSA – 2025 Guide | HSA-Compatible Health Insurance Plans | How To Use Your HSA To Pay for Chiropractic Care | How Much Can Health Sharing Save Compared to Health Insurance?
