Any of a wide array of arrangements in which two or
more small employers purchase health insurance collectively, often through a common
intermediary who acts on their collective behalf. Such arrangements may go by many
different names, including cooperatives, alliances, or business groups on health. They
differ from one another along a number of dimensions, including governance, functions
and status under federal and State laws. Some are set up or chartered by States while
others are entirely private enterprises.
Some centralize more of the purchasing functions
than others, including functions such as risk pooling, price negotiation, choice of health
plans offered to employees, and various administrative tasks. Depending on their
functions, they may be subject to different State and/or federal rules.
For example, they
may be regulated as Multiple Employer Welfare Arrangements (MEWAs).
¨ Association Health Plans – This term is sometimes used loosely to refer to any
health plan sponsored by an association. It also has a precise definition under the
Health Insurance Portability and Accountability Act of 1996 that exempts from
certain requirements insurers that sell insurance to small employers only through
association health plans that meet the definition.