What steps can be taken to increase access to quality health care while controlling
the rising costs of health insurance for small-business employees and their families?
Why it's important
According to the Employee Benefit Research Institute, 60 percent of the 43 million
uninsured Americans are either self-employed or work for small businesses. This
is because rising costs and increased regulations have made it more difficult for
small-business owners to offer health insurance. Small businesses do not achieve
the same economies of scale, purchasing clout and administrative efficiencies through
health plans that currently are available to Fortune 500 companies and labor unions.
On Aug. 2, the House passed the Bipartisan Patient Protection Act (HR 2563), by
a vote of 226-203, with two important amendments. The first amendment places reasonable
limits on lawsuits. The second, concerning access to health insurance, has a provision
for association health plans (AHPs), which would make it easier for an association
to offer affordable health insurance to its members nationwide. Both amendments
are in stark contrast with the Senate's version, dubbed the Patients' Bill of Rights.
This version has relaxed liability limits and excludes meaningful access provisions,
such as AHPs.
An AHP provision, similar to the one in the House bill, would amend the Employee
Retirement Income Security Act (ERISA) to allow small companies to form insurance
pools across state lines under the management of associations, such as NRCA. AHPs
would be subject to strict sponsor-eligibility requirements, including financial
and other reporting criteria for the protection of consumers. In addition, AHPs
could not discriminate against an employer member based on the health status of
employees, previous claims or risk associated with the employer's business.
Key components of the AHP provision:
Small businesses, through bona fide trade and professional associations, would be
able to negotiate better, more affordable agreements with insurance providers, which
larger companies and labor unions currently enjoy.
Small businesses would have the flexibility to choose the coverage they want, including
uniform benefits across state lines.
AHPs would be registered as ERISA plans with the U.S. Department of Labor and subject
to state oversight. However, costly state-mandated benefits would be superceded,
thus enabling small businesses to save an estimated 30 percent in overhead costs.
NRCA supports AHP legislation because it would give small businesses access to affordable
health insurance for millions of uninsured workers and families.
The other side
Opponents of the legislation suggest that it would be difficult to hold AHPs accountable
to enrollees because the plans would not be regulated by individual states.