House Votes to Boost Health Insurance Options for Businesses
New legislation heading to the Senate is intended to give small business more options in the healthcare insurance marketplace.
Source: Thinkstock
By - The House of Representatives has voted 236-175 to move the Small Business Health Fairness Act of 2017 to the Senate in an effort to increase health insurance options for small businesses.
The Act is designed to promote the growth of Association Health Plans (AHPs), or plans that are sponsored by a trade organization, a membership organization that pays dues, or similarly structured groups that require participation to provide coverage.
Lately, lawmakers have expressed concern about anti-competitiveness in the health insurance market as certain payers have pushed for mega-mergers. These mergers have been cited by federal courts and healthcare experts as cut-and-dry violations of antitrust laws.
Under the new small business act, groups could receive coverage under an AHP despite existing state laws. States also would not be allowed to offer health insurance connected to an AHP, as these plans are separate from state-issued insurance.
However, states may be allowed to tax certain AHPs if they pass a law to do so. The taxation rates aren’t allowed to exceed other established rates for other insurers and would recede based upon premiums, excess stop/loss insurance, insurance based on the medical care under the plan, or a combination of those factors.
Self-Insured Association Health Plans, or AHPs that are semi-benefited, fall under the same procedures and guidance.
The self-insured plans could be hosted by multi-trade organizations that range from public accounting to metalworking. Other industries that have average to above-average risk, denials of coverage, or proposed premium rate levels can participate in a self-insured AHP.
Under the bill, AHPs will be governed by a Board of Trustees that have total fiscal and operational control. The Board must outline a three-year plan following the (potential) passing of the bill.
Members of the Board are appointed by their colleges who are participating partners or employers within the organization. They would also have authority over approving applications for enrollment as well as contracting a service provider to administer day-to-day operations of the plan.
AHPs are subject to existing Affordable Care Act regulations, so rates for enrolled members wouldn’t be adjusted because of pre-existing conditions. Rates also can’t be set with varying contribution rates based on state methodology for regulating premiums.
Certain AHPs that don’t cover specific health coverage benefits will be required to have 1000 or more participations. Plans that cover these benefits are allowed to be distributed by state-licensed insurance agents.
The US Treasury would have an AHP fund that requires annual payments of $5000 from certain types of plans. The fund is to act as a reserve and safeguard to keep AHPs operational. The Department of Labor must also establish a Solvency Standards Working Group should the bill pass.
If the Senate pushes this legislation through, healthcare payers will have to adapt to the possibility of newer, niche insurance markets.
