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Paying for health care is one of the most daunting financial challenges for real estate professionals who work as independent contractors. The movement to offer health care coverage through REALTOR® associations got a welcome boost in January 2018 when the U.S. Department of Labor proposed an expanded definition of the term “employer” under the Employee Retirement Income Security Act to include “working owners” of businesses. The change cracked open a door that had long been closed to many REALTORS®. It meant that associations could potentially purchase health coverage by pooling their members. When the rule was finalized last June, REALTOR® organizations in many states began exploring the possibility of creating association health plans that would offer such group benefits. But a host of legislative, regulatory, and judicial challenges brings into sharp relief the bumpy path for wide-scale expansion of AHP options.
Last November, members of the 1,955-member Baldwin County Association of REALTORS® in Alabama became the first REALTORS® in the country to have access to comprehensive, affordable AHP coverage under the new rule. A handful of other local and state associations have followed suit, including the Colorado and Nevada associations.
Baldwin REALTORS® was already looking for ways to provide group insurance benefits as a goal of its recent strategic planning process, so the association was prepared when the Labor Department finalized its rule. Working with Blue Cross/Blue Shield, the association was able to offer a health plan with a variety of options that could save its members as much as 50 percent over what they had been paying on the individual market. Premiums for the Affordable Care Act–compliant health plans start at $437 per month for an individual.
The association predicts that at least 225 REALTORS® will take advantage of the new benefit this year. “Our members are ecstatic and so relieved to have access to affordable health care,” reports Baldwin REALTORS® CEO Sheila Dodson.
About 30 percent of NAR members now purchase health coverage in the individual insurance market (or small group insurance market for those with employees), which is often more volatile and more expensive than the large group market. National Association of REALTORS® research last year showed 14 percent of members have no health insurance.
While the Labor Department’s new rule removed a significant hurdle to REALTOR® AHPs by including the self-employed in the definition of “employer,” a national group health benefit is likely years away. “Unfortunately, it’s a much slower process than most REALTORS® would prefer,” warns Christie DeSanctis, NAR’s director of business and conventional finance policy. “But we haven’t given up. If enough states and local governments support AHPs, a regional or, eventually, a national plan may become a viable option.”
Because federal and state governments jointly regulate health insurance, the federal government can open one door, yet another would remain closed unless the state adopts friendly rules. Insurer apprehension is another reason that an AHP plan may not be available in some states.
Last July, twelve state attorneys general—from New York, Massachusetts, California, Delaware, Kentucky, Maryland, New Jersey, Oregon, Pennsylvania, Virginia and Washington, plus the District of Columbia—filed suit in the U.S. District Court of Appeals in Washington, D.C., against the Labor Department’s rule. The attorneys general argued that the new rules risk destabilizing the individual and small group markets by pulling more people into the large group market, among other claims. As a founding member of the Coalition to Protect and Promote Association Health Plans, NAR filed an amicus brief with the court in support of Labor’s actions. During oral arguments in late January, the judge questioned the department’s authority to change the ERISA rules.
Whatever the court’s decision, NAR continues to advocate for potential health insurance options that offer comprehensive and affordable solutions for members and their families. In the event of a negative ruling, which would likely be appealed, states adopting laws consistent with the Labor Department’s rule are unlikely to be affected. NAR is committed to providing resources for state and local associations to pursue AHP options, working with state legislatures and insurance commissioners. “It’s all about creating options for the REALTOR® community,” says DeSanctis, “and encouraging flexibility in the marketplace as state and federal regulations come into alignment.”
Health Coverage Options Today—From NAR
If you are in need of health coverage solutions today, you can turn to NAR’s REALTORS® Insurance Marketplace. This exclusive one-stop insurance shopping site offers a wide roster of health and supplemental insurance options. Here you will find advice and assistance with ACA plans, plus coverage options just for REALTORS®, including flexible term plans, telehealth, accident coverage, supplemental Medicare insurance options, group dental and vision plans, pet insurance, and more.
Complimentary consultative services are a key part of the benefits available. If you have questions and need assistance with your medical coverage, licensed enrollment specialists are available via phone and can help you find solutions. Learn more at RealtorsInsuranceMarketplace.com or by calling 877-267-3752.
