For the past 30 years, the National Federation of Independent Business has identified the cost of health insurance as the number one problem facing small business owners. The price of health plans for small companies has risen 56% over the past decade. As costs increase, the percentage of small firms offering health insurance continues to drop. 

Joining a buying group, also known as a Group Purchasing Organization, may be one way to help control health insurance costs while offering employees attractive and affordable options. While the Affordable Care act of 2010 limited the expansion of such association health plans to small group plans, new federal rules allow buying groups to offer large group health insurance products across state lines. 

Understanding buying groups 

Buying groups are organizations with member businesses who join forces to leverage better terms when negotiating for various products or services. In many cases, joining a GPO helps smaller companies gain access to pricing schemes and products usually limited to large corporations. In the case of healthcare coverage, affiliate companies that band together may qualify for a wider array of plans and policies while mitigating regulatory burdens that many small businesses struggle to fulfill. 

New federal rules allow for association health plans 

In October 2017, the President signed an executive order specifically allowing small businesses to form health plan buying associations. These associations may incorporate companies in similar industries or geographic areas, enabling separate businesses to share an employee pool and more easily access insurance products available to organizations with at least 100 workers. Joining such a group may also allow smaller companies to exclude certain benefits that the Affordable Care Act currently requires, which could lead to lower premiums. 

When it comes to competing in a tight labor market, being able to offer quality healthcare options at an affordable price is essential. Joining or forming a buying group is one way that small businesses are looking to negotiate the best rates possible when investing in medical insurance policies.