The NASE supports association health plans and legislation to improve access and choice for the self-employed and micro-business with regards to medical care for themselves and their employees. An employee in a firm with less than 10 employees pays 18% more for health insurance than a worker in a firm with 200 or more employees and, alarmingly, heath care costs are continuing to rise for small businesses.

Background:
Along with health care tax credits, Association Health Plans (AHPs), will assist the self-employed and micro-business owners in receiving inexpensive and thorough health care coverage. AHPs would allow small business owners and the self-employed to purchase health insurance in large pools. Small business owners and their employees could access health insurance plans offered through their association regardless of their state of residence, much like the identical plans large employers offer their employees in multiple states. An extension of the Employee Retirement Income Security Act of 1974 (ERISA), AHPs would enable trade associations to do this without having to deal with different state mandates. Many micro-business owners today cannot afford the expense, in time or money, to seek out and offer appropriate insurance plans for their employees. As a result, a significant number of the uninsured are people who work for small businesses. In fact, over 60% of the uninsured reside in a family employed by a small business. Allowing small-business owners to offer plans through an association would extend health coverage to many working but currently uninsured Americans.

Legislative Activity:
Representative Ernie Fletcher (R-KY) introduced H.R. 660, the Small Business Health Fairness Act of 2003, which has gained bipartisan support. In the Senate, the same bill (S. 545) has been introduced by Senators Olympia Snowe (R-ME), Christopher Bond (R-MO), and Jim Talent (R-MO). The Small Business Health Fairness Act of 2003 allows for the creation of Association Health Plans to improve access to health insurance and lower costs for small business.

The Bush Administration has been extensively advocating for Association Health Plans. The Department of Labor released a report on Association Health Plans (AHPs) in September 2002, which specifies clearly how AHPs will expand Fortune-500 health benefits to the self-employed and micro-businesses.

The report, “Association Health Plans: Improving Access to Affordable Quality Health Care for Small Businesses,” takes the important step of addressing critics concerns of AHPs, and finds that the proposed legislation (H.R. 660 and S. 545) ensures that AHPs will have to meet strict requirements designed to protect participants, maintain solvency standards, and protects against adverse selection. Adverse selection is when health plans only select healthy individuals leaving a large group of high risk and/or sick individuals without health coverage. The DOL report uses statistics from the NASE “Affordability in Health Care: Trends in American Micro-Business” June 2002 survey. Secretary Elaine Chao committed the necessary DOL resources to effectively administer the AHP certification and oversight responsibilities. Secretary Chao believes that DOL’s capabilities and commitment guarantee the integrity, financial soundness and oversight of AHPs.

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