Healthcare Executive Order Expands Access to Association Health Plans

IFA leadership plays key role in President Trump’s efforts to lower costs for small business employees, including franchises, by pooling resources to negotiate lower premiums.

 

President Trump signs an Executive Order on healthcare last week with IFA leadership in the room. Official White House Photo by Shealah Craighead.

 

By Andrew Parker

Members of the International Franchise Association Board of Directors, including IFA Chair Shelly Sun, CFE, Second Vice Chair David Barr and Secretary Catherine Monson, CFE — witnessed first-hand U.S. President Donald Trump’s Oct. 12 signing of an Executive Order on healthcare. The order is designed to increase competition in the individual insurance marketplace by easing rules to allow small businesses to band together and create Association Health Plans (AHPs) that could form across state lines.

 

Sun, who is Founder and CEO of BrightStar Care, called the Executive Order a “major step forward” for the franchising community. Currently, she continued, “we feel like there is a disadvantage in negotiation — being able to get the same pricing, and the same access to benefits, that large businesses and unionized employees have enjoyed for decades.”

 

Joining Sun at the signing ceremony were Barr, who is Chairman of PMTD Restaurants, which owns and operates multiple KFC and Taco Bell locations; Monson, CEO and President of FASTSIGNS International; IFA Franchisee Forum Chair Tom Baber, a Money Mailer and IHOP multi-unit franchisee; Jersey Mike’s Subs multi-unit franchisee Mitch Cohen, a member of the IFA Board of Directors; Sport Clips Haircuts Founder and CEO Gordon Logan, IFA VetFran Committee Past Chair; Arlington, Va.-based BrightStar Care franchisee Reem Aloul; Howard James, Washington, D.C. FASTSIGNS franchisee; and Sport Clips multi-unit franchisee Al Rodriguez. Vice President Mike Pence, Labor Secretary Alexander Acosta and other top U.S. government officials attended the ceremony.

 

“This will allow thousands of small business employers to have the same purchasing power as large employers, to get more affordable and generous insurance options for their workers,” said President Trump.

 

With IFA leadership and top U.S. government officials around him, President Trump announced an Executive Order on healthcare Oct. 12. Official White House Photo by Shealah Craighead.

 

Sen. Rand Paul (R-Ky.) held a press conference with Sun and Aloul following the signing ceremony. “The idea with the President’s order is to let individuals get what other people have working for big corporations,” he said, noting that the largest corporation in the U.S. employs less than one million people. “What happens when you let the National Restaurant Association, or the International Franchise Association, when you let them pool together, and you have millions of people and one person negotiating with the insurance companies? I think you might get tremendous leverage,” Paul said. He noted that IFA represents more than 733,000 businesses with a total reach of around 7 million employees. “What if only 20 percent of those, what if you only had a million — that’s still an enormous group. That’s bigger than any corporation.”

 

“We need a mechanism like this to be able to allow us to have the same access and rights as large businesses,” Sun added.

 

IFA Chair Shelly Sun, CFE, introduces franchisee Reem Aloul during an Oct. 12 press conference with Sen. Rand Paul (R-Ky). Watch the video

 

Aloul’s staff consists of five full-time employees with a variable workforce of 80-100 people. “We always struggle to offer insurance to our employees. It’s just unaffordable,” she said. “The idea of not being able to afford insurance for my employees is embarrassing, it’s just wrong,” said Aloul. “Being able to collaborate, negotiate and work together with a group of small businesses across the country to be able to afford that, is an amazing idea. There is a critical need for this in the small business community.”

 

Monson appeared on Fox Business Oct. 13 to discuss the impact on the small business community and FASTSIGNS, which has 660 locations, including 590 in the U.S. “Rather than have a franchisee get group insurance for 10 employees at one location, now we can take those 590 locations, each with 10 employees, and pool our resources and get a better price for 6,000 of our franchisees’ employees,” she said. This results in the ability to bring the power of large group purchasing to franchisees, “and more importantly, to the advantage of their employees… All small business owners can pool together with an association, bringing that strong purchasing power that big companies already have.”

 

FASTSIGNS CEO and President Catherine Monson, CFE, appeared on Fox Business Oct. 13 to discuss Association Health Plans. Watch the video.

 

FASTSIGNS franchisee Howard James is a single-unit operator with 15 employees. “We want to offer our employees quality health coverage, but it’s unaffordable for a business of our size,” he said. “We need affordable policies so we can attract more and better talent.” AHPs would also allow James’ business to remain competitive and efforts to retain good employees.

 

Tom Baber is a multi-unit franchisee of Money Mailer and IHOP, and Chair of the IFA Franchisee Forum. “Healthcare has always been a struggle, and even though we offered 50 percent health coverage to our employees, not all of them opted into the program, so it was hard to negotiate competitive health programs with the large insurance providers,” he explained. “AHPs would allow our companies to band together and offer competitive rates. We need AHPs now because the Affordable Care Act has cancelled one of our plans and we are left without affordable options.”

 

A member of the IFA Board of Directors, Mitch Cohen is a multi-unit Jersey Mike’s franchisee who is a former member of the National DCP Association of New York, a supply chain management company serving Dunkin’ Donuts franchisees. Prior to the Affordable Care Act, he pointed out that “our association’s franchisees could band together in an association health plan, and it worked for my business.” But after the Affordable Care Act was signed into law, he continued, “the rules changed, and I left the program. It was unaffordable.” An AHP would allow Cohen to continue the expansion of his 22-employee Jersey Mike’s business by providing quality, affordable coverage.

 

The IFA contingent to the Oct. 12 signing ceremony, led by IFA Chair Shelly Sun, CFE (center-left) and IFA President and CEO Robert Cresanti, CFE (center-right).

 

Al Rodriguez is a Sport Clips franchisee with 150 employees at 13 locations around Pittsburgh, Pa. He offers health insurance, but only around 30 employees are enrolled. “Owning and operating a business in multiple states is challenging enough,” he noted. “Having a health insurance policy that’s consistent, competitively priced and crosses state lines would eliminate a major concern for small businesses.”

 

When it comes to getting quality, affordable health coverage, small franchise businesses “should not be held to different standards than large corporations or unions,” Logan said. “Association health plans will allow Sport Clips owners to band together to purchase better healthcare for their employees, achieving a much more competitive healthcare marketplace that stretches across state lines.”

 

Andrew Parker is IFA Senior Publishing Manager and Editor-in-Chief of IFA’s Franchising World Magazine.