NAR: Strong Health Insurance Rule Needs Improvement

March 7, 2018

The U.S. Department of Labor's proposal to let more associations offer health plans to their members is a positive step forward, but changes are needed before real estate professionals can realistically benefit, the National Association of REALTORS® wrote in a letter to the department Tuesday.

The proposal modifies and broadens the definition of “employer” to include “working owners,” laying the groundwork for independent contractors and small-business owners to band together as part of an association health plan. AHPs could take advantage of the large group health insurance market, which generally offers greater flexibility in insurance plan design and lower policy costs through improved negotiating power.

The rule defines working owners as self-employed individuals or small-business owners who don’t have employees working for them, which would apply to most real estate agents. But the rule should extend eligibility to all working owners, including those who have access to subsidized insurance through a spouse’s employer plan, NAR says. As proposed, these working owners would be excluded from eligibility on the assumption they already have affordable insurance available to them. There are any number of reasons these working owners would find more appropriate options in an AHP. All working owners, NAR said, “should be given another choice and the freedom to seek coverage under an AHP.”

About a third of NAR members have health insurance through a spouse’s employer plan, about 20 percent don’t have any insurance, and almost half pay for insurance out of their own pockets in the individual insurance market, which is typically the most expensive way to purchase insurance.

“As health insurance costs continue to rise and the number of coverage options shrink, the need for affordable health care remains a top concern for the nation’s 1.3 million REALTORS®,” NAR President Elizabeth Mendenhall said in a statement. “Allowing working owners to participate in AHPs could expand access and provide more reasonably priced health insurance options for individuals and families.”

The Department of Labor will be looking at NAR’s comments as it prepares a final rule. Other real estate organizations, including several state and local REALTOR® associations, submitted comments. The final rule could be issued later this year, and insurers could use it as a basis for designing an AHP plan, although actual implementation of the rule could be delayed if it’s subject to legal challenge.

—Robert Freedman, REALTOR® Magazine