Clearing the way for better health insurance solution for realtors


Steve Stevens, Kentucky REALTORS C.E.O.

As an advocate for businesses of all sizes for approximately three decades now, there has been one issue that has remained consistent for me to hear about from business owners across the board.  It has been their concerns and difficulties in finding affordable health insurance coverage for themselves and their employees.

Over the decades, health care reform attempts have been plentiful, with solutions being sought at many levels.  States and the federal government have made attempts to address a multitude of components and cost-drivers each have identified in their health care systems.  Former Administrations and Congress have made efforts to fix our ailing system, but most of these have only added to the cost of health care in America.  Health care, unfortunately, due to a complexity of factors, does not react or behave like other traditional markets or types of businesses.

REALTORS® are real estate professionals who are members of the local, state and National Association of REALTORS® (NAR).  In Kentucky, more than 11,300 Realtors are members of the state association and involved in all aspects of real estate.  Each is part of the 1.3 million members of NAR which is America’s largest trade association.  The overwhelming majority of these individuals are not employees of realty offices, but independent contractors who operate autonomously from their affiliated real estate companies.  Thus, for most of them, their business expenses and health insurance coverages are paid for out of their own pockets and not by their employers.  

A longstanding method of gaining lower cost health insurance has been to leverage group buying power.  The opportunity to spread insurance risk across a large pool of insureds through multi-employer plans offered through business or trade associations has worked to achieve reduced rates for many businesses who employ people for decades.  Left out until only recently when new federal laws were adopted, however, were independent contractors.  Just two years ago, these businesspeople have been given the ability through federal legislation to participate in association health plans (AHPs).  Both federal and state governments jointly regulate AHPs, so before this could happen, each state had to conform its insurance laws to the federal law.  During the 2019 General Assembly, we were in full support of actions taken by Kentucky’s Legislature to make this happen.

Multiple states across the country have successfully begun AHPs for their members through sponsoring associations.  Despite all the progress, 12 states (including Kentucky) and the District of Columbia filed suit to stop the final rules of the Department of Labor on AHPs.  A recent ruling of the U.S. District Court for the District of Columbia struck down provisions of the Department of Labor’s final rule clarifying the definition of “employer” (under ERISA for the purposes of establishing an AHP).  The states argued the DOL exceeded its authority in issuing the rule, which would circumvent protections put in place by the Affordable Care Act. This action has had a chilling effect on insurers who have been working in states who have not yet had the chance to offer AHPs to independent contractors. As our association has worked with major insurers to evaluate the viability of implementing an AHP, these providers have put us on hold as a result of uncertainty regarding the court ruling and appeal process.

The National Association of REALTORS® supports the appeal of this ruling and has encouraged the Department of Justice to protect the AHP rule that would provide working owners of all types of businesses with new cost-effective health insurance plans.

While we wait for a decision on the court ruling, federal lawmakers are working another angle to solve the problem.  In April, Senators Enzi (R-WY), Alexander (R-TN), and others introduced the “Association Health Plans Act of 2019.” The bill would codify the DOL rule, to protect the expansion of association health plans to small businesses and the self-employed.

The Kentucky REALTORS® and a host of other organizations who represent independent business people remain optimistic that these efforts will result in an outcome that would allow these hard-working Americans the freedom and flexibility to have another option for their health insurance and be able to choose a plan that best suits their needs.