110th CONGRESS, LEGISLATIVE ISSUES A - Z
SMALL BUSINESS HEALTH PLANS (ASSOCIATION HEALTH PLANS)
ISSUE: It is estimated that roughly 45 million Americans do not have health care insurance. This is caused in large part by the high costs of health insurance premiums. Credit unions have seen their health insurance costs skyrocket and take an increasingly larger share of their benefit costs. As a result, many small credit unions are unable to offer health insurance. In CUNA’s 2001 Credit Union Staff Benefits Survey, only 39% of small credit unions (those with less than $20 million in total assets) offer health insurance coverage to their CEO’s – compared to 98% of larger credit unions that offer this benefit.
CUNA POSITION: CUNA strongly supports Small Business Health Plans, formerly referred to as Association Health Plans, as a way for credit unions to provide coverage to their employees.
OPPOSING VIEWS: The National Governors Association, comprised of Republican and Democrat Governors, opposes this legislation because it would preempt certain state regulations of health insurance plans as well as the states’ requirements for health care benefits that must be offered by such entities. The Attorneys General and the Insurance Commissioners of a large majority of the states also oppose this legislation for the same reason. Many insurance companies oppose the creation of such plans.
IMPACT ON CREDIT UNIONS: Legislation to create such health plans would enable small credit unions to pool their resources and offer health insurance at a reduced rate to their employees. Such legislation would also enable credit unions to offer reduced-rate policies to small businesses within their field of membership.
STATUS/OUTLOOK: On July 26, 2005, the House of Representatives passed H.R. 525, the Small Business Health Fairness Act of 2005. This bill, authored by Representative Sam Johnson (R-TX), would authorize Association Health Plans. Under the bill, associations would have been able to offer AHPs to their membership after they became certified by the U.S. Department of Labor. The plans would have had to meet certain requirements and standards.
In addition, former Senate Health, Education, Labor and Pensions Chairman Mike Enzi (R-WY) penned a bill similar to H.R. 525. His legislation, the Health Insurance Marketplace Modernization and Affordability Act of 2005 (S. 1955) was unable to be brought up for a full Senate vote when a minority of Senators filibustered the bill on May 11, 2006.
Passage of any legislation authorizing the establishment of Small Business Health Plans appears unlikely in the 110th Congress. The new Congressional leadership in both Houses of Congress is opposed to the creation of these plans. However, CUNA will continue to advocate the need for this legislation and work for its passage.
CONTACTS: John Hildreth, (202) 508-6724, jhildreth@cuna.coop.
