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Home > BizTimes Daily > Archives > June 10, 2008
'Breakthrough' health plan would help small businesses
Published June 10, 2008 - BizTimes Daily
A bipartisan group of federal legislators, business interests and labor unions today unveiled the Small Business Heath Options Program (SHOP) Act designed to make health insurance more available and affordable for small businesses and their employees.
The legislative contingent supporting the legislation includes: Reps. Ron Kind (D-Wis.), Phil English (R-Pa.), John Barrow (D-Ga.), Bill Young (R-Fla.), Russ Carnahan (D-Mo.), Jo Ann Emerson (R-Mo.), Tom Allen (D-Maine), Jim Gerlach (R-Pa.), Jason Altmire (D-Pa.), Chris Shays (R-Conn.), Joe Courtney (D-Conn.) and Jim Ramstad (R-Minn.).
They were flanked today by representatives from the National Federation of Independent Businesses (NFIB), the National Association of Realtors (NAR), and the Service Employees International Union (SEIU).
Supporters said the plan is "breakthrough" legislation. H.R. 6210 is companion legislation to Senate Bill 2795 introduced by Sen. Richard Durbin (D-Ill.) in early April.
"Small businesses in the United States are in a crisis today when it comes to finding affordable health insurance," Kind said. "With rising costs pricing small businesses out of the market, no surprise that sixty percent of Americans without health insurance are from families where the head of household is self-employed or works in a small business. If we are going to address the lack of health care coverage in this country, we have to first look at small businesses, and the SHOP Act gets to the heart of that."
"As health care costs continue to skyrocket, American entrepreneurs and small businesses are all too often forced to choose between the livelihood of their business and the quality of benefits they provide to their workers," English said. "By establishing a nationwide health insurance pool for small businesses and the self-employed, we can break down the barriers to affordable health insurance and ensure these job producing employers can provide their workers with stronger healthcare options with more choices at a lower cost. The SHOP Act is an innovative, bipartisan compromise that will go a long way to increasing access to affordable, quality healthcare in our country."
The supporters said the SHOP Act will make health insurance less costly, more predictable and more accessible for the 47.1 million employees of the nation's 5.8 million small businesses and for 14.1 million self-employed individuals in America by:
- Allowing small businesses and the self employed to band together in a statewide or nationwide pool to obtain lower health insurance prices by spreading their risk over a larger number of participants.
- Keeping prices low by offering a range of private health plans that have to compete for business.
- Providing small business owners with an annual tax credit of up to $1,000 per employee ($2,000 for family coverage) if they pay for 60 percent of their employees' premiums, and a bonus tax credit if they pay for more than 60 percent of the premiums. Self-employed individuals would get a $1,800 annual tax credit ($3,600 for family coverage) to purchase health insurance.
- Cutting down on administrative costs for small businesses – today, small businesses spend almost 25 percent of health insurance premiums on administrative costs, compared to 10 percent for large employers.
- Banning the practice of rating insurance based on health status and claims experience so that premium increases will be more stable and predictable.
- Providing a web site with comparative information about a variety of private health plans.
- Putting in place accountability measures using existing structures like those use by state insurance commissioners to ensure that all health plans meet state requirements for financial solvency, network adequacy, and claims and appeal procedures.
"We commend this bipartisan group of representatives for supporting small business and working to address their number one concern - the ever-increasing cost of healthcare," said Todd Stottlemyer, president and chief executive officer of the NFIB. "The pooling options and tax credits outlined in this bill directly reflect on NFIB's Small Business Principles for Healthcare Reform, helping to stabilize costs and incentivizing small businesses. We will continue to work with leaders in Congress to pursue new approaches to addressing the healthcare crisis that continues to burden America's job creators."
"For many Realtors and those with families, the total cost of health insurance can rival or even exceed their monthly mortgage," said James Helsel Jr., treasurer of the National Association of Realtors. "This bill will empower trade associations and other organizations to help guide their self-employed and small business members through the process of finding coverage."
