Trump admin to propose new rule that could lower healthcare costs for small businesses

The Department of Labor (DOL) last month proposed a draft rule change that could help small businesses across the U.S. — and the self-employed — better manage their healthcare costs.

What’s happening: The DOL’s proposal, though not yet public, could assist smaller companies in collectively lowering health insurance costs through Association Healthcare Plans (AHPs). 

• AHPs allow local roofing contractors, for instance, to band together in associations and negotiate for lower rates as a larger group. 
• Self-employed workers could also potentially qualify for AHPs under the new rule, according to CNBC. 

The Office of Information and Regulatory Affairs (OIRA) has up to 90 days to review the draft. Once OIRA signs off, the DOL will publish it as an official proposal, opening a public comment period.

State of play: Health insurance is only getting more costly — for both employers and employees. Marketplace insurance carriers are proposing a 15 percent increase in premiums for 2027, and small businesses face a potential 14 percent premium increase next year, according to KFF, a health policy research group. 

What they’re saying: Homepros asked Lexi Branson, Vice President of Health Policy at the U.S. Chamber of Commerce, to help clarify for contractors what the upcoming rule change could mean for their businesses. The following answers have been lightly edited for brevity and clarity. 

What are the current limitations of AHPs?

Under the current framework, an association generally must have a genuine organizational purpose beyond simply providing health benefits; its participating employers must share a sufficient common interest; and the employers must exercise meaningful control over the association and the health plan. That can leave out small businesses that do not fit neatly within those requirements. Self-employed individuals without employees also generally cannot participate.

Who negotiates the rates for AHPs? 

For a fully insured AHP, the association typically works with an insurance carrier and often a broker or benefits administrator to structure coverage for the combined group. The carrier ultimately prices the insurance under the applicable federal and state rules.

The fundamental advantage is scale. A roofing company with 15 or 20 employees has very different purchasing power from an association representing hundreds or thousands of employees. Pooling employers together can create economies of scale, spread administrative costs, and give small businesses access to options that may otherwise be difficult for them to obtain individually.

What reforms do you hope to see for small businesses?

We would like to see a durable framework that gives more legitimate business associations and their small-business members the opportunity to offer high-quality coverage while maintaining appropriate safeguards. Ultimately, a five-person roofing company should have more of the same opportunities to leverage scale and purchasing power that a company employing 5,000 people has.

What should a roofing company do right now if an AHP may help their company?

Talk to your chamber, trade association, or benefits adviser and ask what options are available today. Compare an AHP alongside traditional small-group coverage…looking at both cost and benefits.

And keep an eye on the Department of Labor’s forthcoming AHP proposal. If the administration expands eligibility in a workable and legally durable way, substantially more small employers may have an opportunity to consider AHP coverage in the future.

The broader point is that small employers want to provide good benefits because those benefits help them recruit and retain workers. They aren’t all going to need the same solution. Public policy should give them more tools to provide coverage — not fewer.