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Editorial: Association health plans are key to Washington’s health insurance market

Sat., Oct. 3, 2015

Association health plans cover 500,000 Washington workers and their families, yet Insurance Commissioner Mike Kreidler tried for eight years to shut down some out of the state’s insurance market.

That effort appears to be over, and good riddance.

Thursday, Associated Industries announced an agreement that its president, Jim DeWalt, says should put that struggle behind his Spokane-based organization, which administers plans for six industries in Washington: business services, construction, health care, information technology, manufacturing and retail.

About 1,200 companies participate in those plans, 500 of them in the Spokane area. Bundling like businesses enables the association plans to negotiate lower premiums.

Passage of the Affordable Care Act, with its provisions requiring small businesses to insure their workers, has been a boon for association plans. Enrollment in those offered by Associated Industries has more than quadrupled the past three years from 6,000 to 25,000, putting the organization among the five largest plan administrators in Washington.

The insurance plans themselves are provided by Portland-based Moda Health.

DeWalt says that, despite the urge among some small business owners to dump their insurance plans and let employees buy their own coverage in the individual market, “responsible and concerned” companies continue to regard health insurance as a benefit that helps them recruit and retain good workers.

But Associated Industries and other administrators were challenged by Kreidler, who said they were improperly rating individual groups of employees instead of pooling risk across all groups.

Not surprisingly, litigation ensued. On July 1, an administrative law judge ruled that the ACA allows insurers to rate association health plans by employer. Kreidler said he would not appeal the decision, calling instead for federal officials to clarify the contested provision.

He added that his office would continue to scrutinize all health care plans. His office’s approval of Associated Industries’ 2014 rate filing indicates he is following through on that pledge.

DeWalt, calling the approvals “a victory for small employers,” expects future rate filings will survive the same review.

Clearly, the associated plans are valued by hundreds of businesses across Washington, but Kreidler has been an antagonist going back as far as 2007, when predecessor Deborah Senn − no friend to the industry she used to regulate − lined up on the side of the associations.

Kreidler was also overly fastidious when insurance plans were trying to qualify for sale on Washington Healthplanfinder, the state’s insurance exchange. But, urged to allow as many plans as possible to ensure a robust marketplace, he approved more filings.

Now, with almost 200 plans available, Washington has one of the more successful exchanges in the nation. That will be even more true with the status of association plans finally clarified.