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R&R Insurance Blog

DOL Finalizes Rule to Expand Association Health Plans

Posted by R&R Insurance

Association Health PlansOn June 19, 2018, the Department of Labor (DOL) released a final rule that gives small businesses more freedom to join together as a single group to purchase health insurance in the large group market or to self-insure. These benefit arrangements are called association health plans (AHPs). The final rule allows working owners without other employees, such as sole proprietors and other self-employed individuals, to join AHPs.

The final rule allows employers to join together to form an AHP that is a single ERISA plan if either of the following requirements is satisfied:

  • The employers are in the same trade, industry, line of business or profession; or
  • The employers have a principal place of business within a region that does not exceed boundaries of the same state or the same metropolitan area (even if the metropolitan area includes more than one state).

Most AHPs will not be subject to the Affordable Care Act’s requirement to include Essential Health Benefits (EHB), which requires small group plans to cover a core set of 10 major items and services, such as mental health care, maternity and newborn care, prescription drugs and emergency services. Most AHPs will also be exempt from the ACA’s rating restrictions for the small group market, which means that AHPs may base premiums on factors such as age, industry and gender. The final rule requires AHPs to comply with certain consumer protections and anti-discrimination protections that apply to the large group market (learn more).

R&R will continue to keep you informed as we monitor developing guidance regarding AHPs and other benefits matters at the federal and state levels. For a more complete understanding of the new AHP rule, click here to read more.

Topics: Compliance, benefits

Captives | Is Alternate Funding Right for You?

Posted by Riley Enright

iStock-585163652.jpgHaving an attractive employee benefits option is more important than ever before. Attracting and retaining talent has become increasingly difficult and offering a quality benefits package can play a large role in the process.

In addition, you may want to protect your company from the risks associated with offering employee benefits. While employers have traditionally insured their employee benefits risks through an outside insurance carrier, the increased demand for employee benefits has resulted in an inflation of costs. Because of this, many employers have opted to cut out insurance carriers altogether and fund their group employee benefits risks with captives.

If you aren’t familiar with captives, let’s start with the basics. Captives are a form of self-insurance in which the insured owns the insurer. They are created and owned by at least one non-insurance company for the purpose of insuring the employee benefits risks of its owner.  A captive can offer significant savings and become a substantial long-term investment. However, they may not provide the same benefits for every company, and the return on investment may be low.

R&R Insurance has extensive experience in the world of employee benefits. We welcome the opportunity to discuss the advantages and disadvantages of captives with your organization.

Information provided by Zywave, Inc

Topics: Employee Benefits, benefits, Captives, Alternate Funding