Key Vote Letter on H.R. 660, the "Small Business Health Fairness Act of 2003"
June 16, 2003
To Members of the United States House of Representatives:
The U.S. Chamber of Commerce, the world's largest business federation representing more than three million businesses of every size, sector and region, urges you to vote for H.R. 660, the "Small Business Health Fairness Act of 2003." This legislation will expand the availability of health coverage for employees of America's small businesses by allowing employers to join together through bona fide associations to buy health coverage under an Association Health Plan (AHP).
More than 41 million Americans lack health insurance, and approximately 60% of the uninsured work for, or reside in, a family employed by a small business. Small employers face significant challenges in accessing affordable health insurance coverage – on average, their premiums are 20 to 30 percent higher than those of large self-insured companies. Moreover, administrative expenses for small group plans are 25 to 27 percent of premiums, compared to about 5 to 11 percent for large business plans.
H.R. 660 offers small businesses greater bargaining power, economies of scale, administrative efficiencies, and the benefits of a uniform regulatory structure under the same federal law governing health benefits for large corporations and unions. Health plan mandates, rating reform and regulatory requirements enacted by the states have driven up the cost of small group coverage and stifled competition. Small employers have few, if any, alternatives to their current health plan when presented with dramatic rate increases. AHPs will invigorate the market for small group coverage and provide competitive choices both for businesses and their employees.
Critics of opening the small group insurance market to more competition charge that AHPs will lead to "cherry picking" and destabilization of the small group market. In fact, AHPs are fully subject to the portability requirements contained in ERISA that clearly prohibit discrimination based on health status. Sponsoring entities must extend coverage to all members eligible for membership benefits and may not vary employers' dues based on health status. In addition, the solvency standards, plan requirements and patient protections included in the legislation are more stringent than those now required by some states. Plans must also comply with the extensive requirements under ERISA governing coverage of certain benefits as well as procedures for appeals of claims denials.
Small business is the backbone of our nation and has driven much of the economic boom of the last decade and century. If small employers continue to face annual premium increases of 20 to 30 percent, they will be unable to remain competitive and contribute to the growth of the U.S. economy. H.R. 660 is essential to improving access to health care coverage and making it more affordable for small business employees and their families. For these reasons, the U.S. Chamber of Commerce will include votes related to H.R. 660 for inclusion in our annual "How They Voted" rankings.
R. Bruce Josten
Executive Vice President
U.S. Chamber of Commerce