Small Business Health Plans Bill Passes Senate Committee

In a move that could mark the end of a long-running stalemate, the Senate Health, Education, Labor and Pensions Committee voted on March 15 to allow business and trade associations to join together across state lines to offer affordable health insurance to their employees.

The bill, the Health Insurance Marketplace Modernization and Affordability Act, is the latest attempt to enact a federal law that would permit trade associations to offer group health coverage on a national or regional basis. The concept of small business health plans (SBHPs) has been highly controversial because the plans would be exempted from state mandates and would not be overseen by state insurance regulators. Proponents of association plans claim the plans would make health insurance considerably more affordable for small business owners and their employees.

Commenting on the passage of the bill in committee, Dan Danner, executive vice president of the National Federation of Independent Business (NFIB), said, "SBHPs will level the health-insurance playing field and give participating small businesses the same buying power as Fortune 500 companies and unions by allowing them to band together through trade and professional associations to purchase affordable health benefits."

Danner added, "By joining together across state lines, small employers will enjoy savings from greater bargaining power, economies of scale and administrative efficiencies."

Bill sponsor Sen. Mike Enzi (R-WY) believes that most of the previous objections raised by opponents of SBHPs have been addressed in the new legislation. The bill, the senator said, preserves the states' role in protecting insurance consumers, requires associations to offer a comprehensive package of benefits, and includes safeguards to prevent premiums from becoming unaffordable for the less healthy.