The Path Toward REALTOR® Association Health Care

Associations of all kinds strongly applauded President Donald Trump’s executive order last year directing the Department of Labor to enact rulemaking that would expand association health plan eligibility to the self-employed and small business owners. Previously, the department did not consider associations with self-employed members to be eligible to offer health plans regulated under the large-group market.

The new rules allow more groups to form association health plans.

Despite the new opportunities to offer health coverage, several hurdles remain. First, there’s a lawsuit that could overturn the new federal rule entirely, possibly before remaining parts of it go into effect. A dozen state attorneys general, including from the District of Columbia, are suing the department over the association health plan rule, arguing that the final rule violates consumer and state protections, among other claims. A decision in this case is expected as early as February.

Despite this, NAR is moving forward with exploring health insurance solutions by conducting surveys, retaining outside health insurance legal experts, and consulting with large insurance companies, along with other efforts to determine the potential options for members.

There’s also this: President Trump’s executive order is just that: an executive order, not a law. The rule could be overturned by a new administration. NAR-supported legislation such as the Small Business Health Fairness Act of 2017 (H.R.1101), which would more firmly establish association health plans, passed the U.S. House of Representatives in 2017. However, it was not taken up by the Senate and would need to be reintroduced in the new Congress.

Another major hurdle association health plans face is that they are subject to different rules in each state. The federal rule enabling association health plans leaves many details up to the 50 states and does not pre-empt state regulation of insurance. “This means we have a fragmented regulatory environment of hostile states and friendly states, with some states embracing the new rule and some rejecting it, and some including sole proprietors, some not,” says Christie DeSanctis, an NAR policy director.

As a result of the different regulatory approaches among states and the pending litigation causing general uncertainty, no national health insurance carrier is willing to offer nationwide insurance to NAR at this time, says DeSanctis.

Meanwhile, NAR has co-founded the Coalition to Protect and Promote Association Health Plans, a broad multi-industry coalition of trade associations, to lobby states to view the federal rule more favorably and to push for legislation that would protect large-group eligibility for sole proprietors.

What about state or local solutions?

Several REALTOR® associations recently introduced health insurance benefits to members, while many others have offered health insurance programs for years. Many of these benefits are not association health plans but instead help members find affordable health insurance through existing markets, which for many REALTORS® is half the battle.

For example, the Bay East Association of REALTORS® and the North Bay Association of REALTORS® in Northern California offer members free access to an independent insurance agency that can place members in individual and group plans both approved by the Affordable Care Act and outside the ACA. Likewise, the Massachusetts Association of REALTORS® partners with Health Services Administrators, New England’s largest benefits marketplace for small businesses, individuals, associations, and chambers of commerce, to help members find options under a variety of insurers.

The National Association of REALTORS® has offered this service since 2013 through its REALTORS® Insurance Marketplace. Every year, thousands of members find affordable coverage through this member benefit.

“We help members navigate major medical plans currently available through the ACA exchanges and outside of them,” says Shannon Kennedy, president of SASid Inc., administrator of NAR’s REALTORS® Insurance Marketplace. “Plus, we explain the benefits of supplementary plans and offer group dental and vision.”

For 2019, REALTORS® Insurance Marketplace began offering new flexible term health plans that provide a more affordable insurance option. New federal rules expand the time limit of these plans from 60 to 364 days and allow limited renewals. This change, and the elimination of the mandate to have qualified health insurance or face a tax penalty, enables members to consider lower-cost major medical plans tailored to their needs.

Some REALTOR® associations face state regulatory hurdles in their effort to offer members affordable health insurance.