Small Business Health Plans

More than 44 million Americans are uninsured, with nearly 60% of those employed by small businesses. As health care costs continue to rise, fewer employers and working families will be able to afford coverage, and the number of uninsured Americans will inevitably rise.

To make health care more affordable and accessible for small businesses, the Chamber promotes passage of legislation that would create federally regulated small business heath plans (SBHPs), also known as association health plans (AHPs). Allowing small businesses to arrange their health benefits through associations will make coverage more affordable by spreading risk among a much larger group, strengthening negotiating power with plans and providers, offering insurance across state lines, and reducing administrative costs. To appeal to their broad membership bases, associations will need to offer comprehensive benefit packages that meet a broad array of health needs and preferences.

Small Business Health Plan legislation (previously known as Association Health Plans) - has been introduced again this Congress. The House has once again passed its version of the bill. The focus is now on the Senate.

109th Congressional Action

Small business health plans (SBHPs) would make health care more affordable and accessible for small businesses. The House of Representatives has passed this legislation seven times, and President Bush has made the enactment of SBHPs a central feature of his second term health care agenda. This legislation has remained stalled in the United States Senate, for over a decade.  However, the Senate did bring the legislation up for debate in May 2006.

Sen. Michael B. Enzi (R.-WY), chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee, introduced new legislation, S. 1955, the Health Insurance Marketplace Modernization and Affordability Act, in November 2005, to address the concerns of SBHP opponents and to reach compromise on the issue. The Senate HELP committee passed this legislation on March 15.  During Health Week (May 9-12), the Senate brought S. 1955 up for debate. 

Unfortunately, May 11, we did not have enough votes to overcome a filibuster on Small Business Health Plan (SBHP) legislation (S. 1955, the Health Insurance Marketplace Modernization and Affordability Act).  While it is uncertain whether the Senate will consider this legislation again this year, the response from the business community was overwhelming and you are to thank for getting the bill this far.  A vote on the Senate floor is unprecedented!  But SBHP legislation does not end here.  Senator Enzi (WY), who proposed the legislation, will attempt to re-work the bill to attract the support necessary to win a future vote.

It is imperative to note that this is the first time in 11 years that small business health plan legislation was debated on the U.S. Senate floor.  That is tremendous progress and it would not have happened without the support of small business like yours.  The vote to end debate and avoid filibuster was 55 - 43.  We were only five votes short of the 60 votes needed to avoid a filibuster and move to a final vote.

The outcome is disappointing, but support like yours got this issue to the floor with a majority supporting it.  This is the highest member response we have ever seen and you should be proud of the work you did.  The stage is set for Small Business Health Plans to come up again and fare even better!

U.S. Chamber Position

The Chamber continues to advocate for the passage of legislation to create federally regulated small business health plans (SBHPs), which would make health care more affordable and accessible for small businesses.

While S. 1955 does not include all provisions of the House-passed legislation, it will enable bona-fide trade and professional associations to offer uniform fully-insured health insurance plans across state lines to their membership, while maintaining a meaningful role for state oversight. It will also go a few steps further to bring harmonization to the small group insurance market as a whole.

The Chamber is currently active in a coalition of businesses and associations advocating the enactment of SBHPs in the 109th Congress. This coalition has commissioned a study to measure the anticipated effect SBHPs will likely have on reducing the number of uninsured and employer costs and anticipate that the findings of the study will solidify a case for SBHPs.

• S. 1955 Legislative Summary (PDF)
• Talking Points for Small Business Health Plans (PDF)
• How SBHPs Benefit State and Local Chambers of Commerce