The senate may finally be ready to provide what many entrepreneurs believe will be an Rx for their health insurance woes. As has happened in Congresses since 1996, the House will undoubtedly pass legislation allowing small businesses to join trade associations called Association Health Plans. AHPs would purchase the kinds of group health plans only big businesses can buy now. The House Education and Workforce Committee took the first step in March when it passed the Small Business Health Fairness Act (H.R. 525/S.406).
In past years, similar bills have passed the House, only to languish in the Senate Health, Education, Labor and Pensions Committee. But this year, the committee has a new chair, Sen. Mike Enzi (R-WY), who appears more receptive to the bill, and a number of first-year GOP senators are co-sponsoring the bill with Olympia Snowe (R-ME), increasing its chances. Democratic support is still sparse.
The legislation changes the Employee Retirement Income Security Act of 1974 to allow AHPs. Under ERISA, employers and unions offering health insurance products to their employees must comply with state regulation for these health policies. As part of their regulations, states impose specific coverages on ERISA plans, which increases the cost of insurance beyond the means of most small businesses. Big companies can self-insure, but most small companies cannot, so they miss out on plans with much lower premiums than those offered by insurance companies. With AHPs, small companies could join together to self-insure.
There are no guarantees, but given the climbing number of uninsured Americans--27 million working Americans at last count--exigency may finally lead to action.
Stephen Barlas is a freelance business reporter who covers the Washington beat for 15 magazines.