Wyoming Sen. Mike Enzi is championing the idea of making it easier for small businesses to join together to offer health insurance to employees.
The Republican senator has introduced legislation to allow for association health plans, which small businesses could access, and pushed for the concept on the Senate floor Thursday.
“Association health plans work,” Enzi said in a press release. “They provide coverage to people who would not otherwise have it, and they provide comprehensive health benefits at an affordable price.”
Association health plans let small businesses negotiate with their shared power in numbers to obtain health insurance as though they were a single large employer.
In a report that the Jackson Hole News&Guide covered in March, experts at the Kaiser Family Foundation said association health plans could be one solution of many to exorbitant premiums for unsubsidized people looking for plans on the marketplace, especially in rural states.
But critics say these plans don’t have to follow some Affordable Care Act market rules and could siphon younger and healthier people away from the marketplace, ultimately driving up premiums.
There’s extra incentive to find solutions, be it association health plans or something else, in states like Wyoming, which has the highest average premiums in the nation for individuals who do not qualify for subsidies.
“Small businesses ought to have the opportunity to band together in order to leverage their combined strength, so they can negotiate and provide their employees with comprehensive and affordable health insurance coverage,” Enzi said. “That coverage should be subject to the same consumer protection requirements that apply to large employers offering similar coverage. Small businesses and their employees are the bedrock of our country’s economy, and proper health insurance coverage is a key element of family well-being and peace of mind.”
There has been informal talk among some larger Teton County employers — like St. John’s Medical Center, Jackson Hole Mountain Resort and Teton County School District No. 1 — of banding together. That won’t be happening anytime soon. When reached for comment, the resort said it was too early to discuss plans, and the school district just renewed their insurance — seeing a 3 percent increase in premiums this year — with a group insurer for Wyoming public schools on Wednesday.
There’s often good reason for small businesses to join forces. According to the National Conference of State Legislatures, they pay 8% to 18% more on average than large businesses for the same insurance policy. The number of small businesses offering coverage has dropped over the years, from 47% in 2000 to 30% in 2017.
Enzi’s legislation is in response to U.S. District Judge John Bates in Washington, D.C., rejecting the Trump administration’s attempt to do something similar. Bates said the administration’s rule expanding access goes beyond its authority.
“The final rule was intended and designed to end run the requirements of the ACA [Affordable Care Act], but it does so only by ignoring the language and purpose of both ERISA [Employee Retirement Income Security Act] and the ACA,” the judge wrote as reported in Modern Healthcare.
Since the rule was finalized, roughly 30 health associations plans have been formed. According to the Congressional Budget Office, about 4 million people are expected to enroll in one by 2023, roughly 400,000 of whom would otherwise be uninsured.
Enzi said making health association plans more accessible could address the number one problem facing small businesses for the past three decades — the high cost of health insurance.