BOMA International Position
BOMA International supports H.R. 525 and S. 406, the Small Business Health Fairness Act of 2005.
Official title: A bill to amend Title 1 of the Employee Retirement Security Act of 1974 to improve access and choice for entrepreneurs with small businesses with respect to medical care for their employees.
H.R. 525
* Introduced February 2, 2005 by Rep. Sam Johnson (R-Texas).
* 135 Cosponsors (127 Republicans; 8 Democrats)
* Passed by the House Education and the Workforce Committee along party lines (25-22) and placed on House Calendar (no date set yet).
S. 406
* Introduced February 16, 2005 by Sen. Olympia Snowe (R-Maine).
* 12 Cosponsors (11 Republicans; 1 Democrat).
* Referred to Senate Health, Education, Labor and Pensions Committee. Full Committee hearing held by the Senate Small Business and Entrepreneurship Committee (National Association of Realtors’ president Al Mansell testified in support of the bill). No further action scheduled.
Bill Summary
The legislation would amend the Employee Retirement Income Security Act of 1974 (ERISA) to provide for establishment and governance of association health plans (AHPs), which are group health plans whose sponsors are trade, industry, professional, chamber of commerce, or similar business associations and which meet certain ERISA certification requirements. Through ERISA preemption of state laws, certified AHPs are exempted from state regulation of health insurance providers, including state consumer protection laws and state requirements for health care benefits to be offered by such entities, with certain exceptions.
Supporters believe that small businesses could increase their purchasing power and make health coverage more affordable, which would allow more small businesses to participate and more workers to receive coverage. AHPs would be allowed to operate across state lines and to receive the same kind of protections as plans offered by labor unions and large corporations. This would allow BOMA International, for example, to offer a health insurance plan to both employees of the local BOMA associations as well as self-employed and small business members of the association.
Opposition
Many Democrats are concerned that insurers would have no incentive to cover preventive care or some expensive procedures if the law did not require them to do so. Also, insurers that currently dominate the small business and individual insurance markets oppose the legislation. Governors and state insurance commissioners oppose it as well, as they believe it would limit their ability to regulate AHPs. Others have observed that AHPs would create a “second-class” type of heal insurance, “cherry pick” the best risks from the pool of individuals currently insured by individual policies, and leave the individual market with only the worst risks.
Outlook for Action
HR 525 will likely pass the House of Representatives in the very near future; they passed two similar bills in the last session of Congress. While the Senate did not act on any bills last session, it remains a priority of President Bush and Senate Majority Leader Bill Frist (R-Tenn.) has voiced his support.
Approved by the BOMA International Board of Governors June 26, 2005