September 01, 2005


 House passes bill making health care affordable for small businesses

Posted August 15, 2005

On July 26, the House of Representatives passed the Small Business Health Fairness Act—a bill strongly supported by the AVMA that would allow small businesses to band together through associations and purchase quality health care for workers and their families at a lower cost.

The bill, H.R. 525, would create association health plans for small businesses. These plans would increase small businesses' bargaining power with health care providers, give them freedom from costly state-mandated benefit packages, and lower overhead costs by as much as 30 percent. Large corporations and unions already enjoy these benefits because of their larger economies of scale.

Association Health Plan legislation has been introduced in the past four congresses. It has passed in the House but been defeated in the Senate during each of those congresses. Some of the large health insurance carriers and state health insurance commissioners oppose the bill.

Unfortunately, during the current Congress, the needed Senate version of the Small Business Health Fairness Act (S. 406) has lingered in the Committee on Health, Education, Labor, and Pensions since this past April.

Individual states currently determine what types of health insurance plans are offered within their borders. The legislation will permit associations and trade groups to provide more affordable health insurance policies to their members and their members' employees in all 50 states.

The AVMA Group Health and Life Insurance Trust is an example of an association health plan. Many AVMA members are small business owners affected by the lack of insurance coverage. At this time, AHPs such as the AVMA-GHLIT cannot be purchased by association or trade group members in seven states: Maine, Massachusetts, New Hampshire, New Jersey, North Dakota, Vermont, and Washington.

In addition, AVMA members cannot purchase GHLIT policies for their employees in any state.

"Small business owners and their employees are clamoring for relief from the high costs of health insurance. It's high time Congress did something about it," said Texas Rep. Sam Johnson, chairman of the Employer-Employee Relations Subcommittee and lead sponsor of the bill.

For more information about the legislation, contact Dr. Michael Chaddock, director of the AVMA Governmental Relations Division, at (800) 321-1473, Ext. 3210, or