Chamber Hails House Passage of Small Business Health Plans

WASHINGTON, D.C.—The United States Chamber of Commerce praised the House of Representatives for passing H.R. 525, the Small Business Health Fairness Act of 2005, a bill that allows for the creation of association health plans (AHPs).

"This measure is a critical step toward protecting small business workers and adding more coverage options, with no impact on federal spending," said Kate Sullivan Hare, Chamber executive director of health care policy.

AHPs offer small businesses greater bargaining power, economies of scale, and administrative efficiencies under the same federal law governing health benefits for large corporations and unions. This bill ensures that only true associations can provide members with coverage, and that sponsoring associations must comply with federal laws protecting workers with preexisting conditions and offer coverage to all qualifying members on an equal basis.

The bill is unique among proposals in meeting the growing needs of smaller enterprises with employees in several states, according to the Chamber. Businesses with employees in multiple states, or those that desire to expand across state lines, must manage multiple health plans because they lack the resources to self-insure as larger businesses do.

"Small business is the backbone of our nation and has driven much of the economic boom of the last decade," said Sullivan Hare. "H.R. 525 is essential to improving access to health care coverage and making coverage affordable for small business employees and their families."

More than 45 million Americans lack health insurance, and approximately 60 percent of the uninsured are employed by small businesses or are dependent on someone who is. Premiums in the small group insurance market can be 20 to 30 percent higher than those of large, self-insured companies, while administrative expenses account for 25 to 27 percent of small business premiums, compared to about 5 to 11 percent for large employer plans.

The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector, and region.

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