States Consider Legislation to Help Small Businesses Provide Health Insurance Benefits:

Although employer-sponsored health benefits remain out of reach for many small businesses, the issue tops many small firms' legislative agendas this year, the Washington Post/Los Angeles Times reports. One idea small businesses are advocating is to establish "association health plans," or plans operated by trade groups or professional associations. The House has passed association health plan legislation four times in the last few years, and President Bush "endorsed" the idea during his presidential campaign (Crenshaw, Washington Post/Los Angeles Times, 2/28). In Arkansas, the state Senate is debating the Health Insurance Purchasing Group Act (HB 1660), which would allow businesses with up to 100 employees to "join together" in groups of at least 500 employees and jointly purchase health insurance. The state House has passed the bill unanimously (Arkansas Democrat-Gazette, 2/28). Association health plans would allow small businesses to "band together to enhance their purchasing power and realize economies of scale." If such legislation is approved, the plans would be "exempt from state regulations," as self-insured health plans of large employers now are. That exemption would allow plans to operate across state lines and would free them from state "mandates," or requirements that plans cover certain conditions and treatments. According to John Emling of the National Federation of Independent Business, association plans would lower small businesses' health care costs, increase their coverage options and "level the playing field." The federation estimates that association health plans would save small business owners 30% in administrative costs and as much as 13% in premium costs. However, some small businesses remain skeptical of association health plans, fearing that they "might not meet individual small firms' needs much better than what's out there now." Todd McCracken of National Small Business United said, "Different associations are going to design different plans at different prices. It could make shopping for insurance more complex" (Washington Post/Los Angeles Times, 2/28).

Reducing State Mandates
Other states are considering reducing state mandates -- such as coverage for mammograms and contraceptives -- to help control "soaring" insurance costs for small businesses. The Georgia Legislature is considering HB 434, which would make coverage mandates optional "if the insurer and purchaser agree." The proposal would apply only to individuals and firms with no more than 50 employees. The bill is intended to help small businesses purchase and maintain employee coverage "by allowing more inexpensive group insurance," the Atlanta Journal-Constitution reports. Business groups who support the bill say it would help small firms and individuals "tailor coverage to their needs" (Miller, Atlanta Journal-Constitution, 2/24). In Florida, legislators are trying to mandate coverage for infertility treatments during this legislative session. Last year, the Legislature passed several laws to help small businesses obtain "affordable" coverage, but this year, business owners are asking lawmakers to "avoid making any changes," including adding mandates. Firms say that changing insurance laws could discourage insurers from "do[ing] business" in Florida. Bill Herrle, state director of the National Federation of Independent Business in Tallahassee, said, "It's natural for insurance companies not to enter the market when it's uncertain what the rules will be" (Lundine, Orlando Business Journal, 2/26).

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