Health Benefits Game Changer for Small Credit Unions (<50 Employees)

Executive Order 13813 directs the DOL Secretary to consider issuing regulations that will expand access to more affordable health coverage by permitting more employers to form Association Health Plans (AHPs).  This proposed regulation would define the term “group or association of employers” under ERISA section 3(5) more broadly, in a way that would allow more freedom for businesses to join together in organizations that could offer group health coverage regulated under the Affordable Care Act as large group coverage.

Proponents contend that AHPs can help reduce the cost of health coverage because of increased bargaining power, economies of scale, administrative efficiencies, and transfer of plan maintenance responsibilities from participating employers to the AHP sponsor. AHPs may also help contain costs by creating a stable risk pool that may enable AHPs to self-insure rather than purchase insurance from commercial insurers.

AHPs sponsored by pre-existing associations (i.e. Credit Union Leagues or Associations) that exist for reasons other than offering health insurance might have more potential to deliver administrative savings than those set up just to offer health insurance.

CU Benefits Alliance has offered a credit union, self-insured health program for more than five years and the same strategy will work extremely well with our Credit Union AHP once it is approved. The credit unions in the CU Benefits Alliance program have enjoyed 15%-30% reduction in healthcare costs and cumulatively saved more than $6 million over the past five years.