Major health-care savings and protections are on the horizon for the more than 11 million Americans who work for or own small businesses. Today, the US Department of Labor finalized regulations to expand Small Business Health Plans — also known as Association Health Plans. This will help level the playing field for smaller and mid-sized businesses by allowing owners and their employees to enjoy similar health coverage benefits as large employers.
For hard-working restaurant operators and workers across the country, it comes not a moment too soon. As health-care premiums continue to increase, these innovative plans can provide small businesses with negotiating power, reduced costs and flexibility.
The new policy empowers small businesses to advocate for better, more affordable health care. By banding together in an AHP, small-business owners will now be able to purchase high-quality insurance at a more affordable price. Of course, that will benefit their bottom line, as well as their local economies. More important, this will help millions of Americans and their families stay happy and healthy.
For the first time, this rule will allow smaller, local restaurants or retailers in a rural area to all participate in a single Small Business Health Plan in order to offer insurance to their employees. On average, a single employee premium in 2017 was $6,690 according to the Kaiser Family Foundation. That cost is up 133 percent since 2002, which is significantly higher than core inflation and wage increases. Due to these high costs, small businesses offering insurance dropped from 63 percent in 2006 to 56 percent in 2016. Through AHPs, local coffee shop owners or restaurateurs now can join forces to create their own health plan.
We’re already seeing the creation of plans like the Restaurant & Hospitality Association Benefit Trust, which offers members of the National Restaurant Association a selection of more than 120 plans with medical and specialty benefits, including wellness options. Restaurant owners and operators participating in the trust now enjoy a reduction of administrative costs through economies of scale, and they have strengthened their bargaining positions while enhancing their ability to self-insure.
Empowering small businesses to band together to offer affordable health coverage to their employees is long overdue and will help millions of Americans. Moreover, this is proof that the answer to expanding access to affordable health care does not lie in increased federal spending, but instead in giving people the power to purchase the health care that best meets their needs.
Early champions, including President Trump and Labor Secretary Alexander Acosta, have made good on their promise to support the 11 million people employed by small businesses in America. Supporting AHPs serves those who serve us every day by giving small businesses who are priced out of the current health-care system an opportunity to access affordable health care.
Ask any small business owner: they’ll tell you that their greatest asset is their work force, and one of their biggest costs is recruiting, training and retaining top talent. As owners face an increasingly competitive hiring market, offering health coverage is increasingly important.
Keeping employees happy and healthy reduces turnover and keeps business’ bottom lines healthier, too.
Dawn Sweeney is President and CEO of the National Restaurant Association.