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Health Care Associations, Insurance and the Restaurant Industry

November 10th, 2017

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By: Chris Mora

President Trump’s recent signing of the Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States allows individuals and small businesses in associations to purchase health insurance plans across state lines. This order, crafted in part by Rand Paul (R-KY), provides millions of people access to more affordable, high-quality health insurance plans.

This order gives small businesses the ability to join Health Care Associations (HCA) based on certain types of professional, trade, or interest groups that offer Association Health Plan (AHP) insurance to members. Put simply, the order allows “more small businesses to pool their resources into associations that would then use their purchasing power to buy group plans for their employees”.

One of the groups that should benefit most is the restaurant industry. Sen. Rand Paul noted in a recent op-ed, “Many of the 28 million people left behind by Obamacare who still don’t have insurance work low-wage jobs in our fast food restaurants. The President’s decision today will allow workers from two million restaurants to come together to form a buying group and through sheer size, get cheaper and better insurance.”

According to Restaurant.org., “The National Restaurant Association supports reforming the Affordable Care Act to broaden access and lower employer coverage costs.”

Reformation is clearly needed. Statics from advocate group Restaurants Opportunities Center show that “almost 9 out of 10 restaurant workers lack paid sick days (87.7%) and health insurance from their employer (89.7%). As a result of the fact that workers cannot afford to take care of themselves or stay home when they are sick, two-thirds of restaurant workers (63.6%) work when sick, unnecessarily placing co-workers and diners at risk.”

If this new executive order acts as intended, then accessible healthcare and increased access to health reimbursement arrangements, and expanded short-term, limited-duration insurance solutions will be more readily available, making it possible for these new HCAs to allow their members to have significantly more leverage when negotiating with insurance companies.

Some contend, however, that for these new HCAs to be successful they would need to be free of state regulations, which would require some states to change their laws to allow their citizens to use association health plans. Congress may need to pass a law requiring states who receive federal funds to do so. These changes are necessary as the benefit of an association is to be considered a large group plan, which would instead be overseen by the federal government and not subject to many of Obamacare’s rules, such as offering coverage across 10 broad “essential” categories of care, including hospitalization, prescription drugs and emergency care.

While there are still a number of obstacles in the way of Health Care Associations offering AHPs to become a reality, with this signed executive order, the path is becoming more defined.

If you have questions regarding healthcare plans and your business, I have over eight years in the Employee Benefits market and look forward to answering your questions and strategizing options with you. Contact me for more information.

Be sure to visit our Employee Benefits page and our Foodservice Specialty program page for more information on the insurance solutions we provide.

Chris Mora

Employee Benefits Consultant

Chris Mora has over 8 years of experience in the Human Capital Management and Benefits field. His specialties include large and small group benefits, human resources strategies, ACA expertise and human capital management technology consultation.