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November 2005
by James C. Musser, ASBA Washington Representative

November brings good news for small business owners and their employees looking for health insurance coverage. Senator Michael Enzi (R-WY) who chairs the Senate Committee on Health, Education, Labor and Pensions (HELP Committee), has introduced the Health Insurance Marketplace Modernization and Affordability Act of 2005. The Enzi bill, also known as S. 1955, is a huge step forward in the Senate effort to pass Association Health Plan (AHP) legislation because Enzi’s HELP Committee has jurisdiction over health care related legislation like AHPs. The legislation would allow businesses and their trade associations to band their members together to offer group health care coverage on a national or statewide basis.

During his introduction of the bill on the Senate floor, Senator Enzi commented on the difficulties many face in trying to find health coverage. Enzi said, “Those hardest hit are America’s small businesses and those individuals outside of employer-provided insurance.” The Senator continued saying, “These are the ones with the least market leverage and the weakest ability to pool risk. Already, among the very smallest of our businesses, those with fewer than ten employees, only 52% offer coverage to their employees.”

Senator Enzi, an accountant and computer programmer by training, was a small business owner prior to joining the U.S. Senate. Enzi serves on the Senate Small Business and Entrepreneurship Committee and the Senate Committee on Banking, Housing and Urban Affairs in addition to chairing the HELP Committee.

Senator Enzi, who was joined by Senators Conrad Burns (R-MT) and Ben Nelson (D-NE) as original cosponsors of the bill acknowledged the work already done on the AHP issue by Senator Olympia Snowe (R-ME), who chairs the Senate Small Business Committee, and Senator Jim Talent (R-MO). Chairman Enzi said, “Regrettably, debate over these AHP pros and cons has hardened into a political and stakeholder stalemate - a stalemate that has helped block constructive action on new health insurance reform for nearly a decade. It is time we broke this logjam and moved forward. Toward this end, I sincerely appreciate the hard work of Senators Snowe and Talent and other AHP proponents in working with me on possible compromise approaches. And similarly, I am encouraged by what appears to be a growing pragmatic spirit among traditional AHP critics.”

The Enzi bill will require AHPs, also referred to as Small Business Health Plans (SBHPs), to obtain federal certification to offer coverage. It will also require SBHPs to be governed by a board of trustees with full fiscal control and requires that the association offering the plan be established for a purpose other than offering health coverage. Under the terms of the bill, associations seeking to offer SBHPs must have been in existence for at least three years prior to the legislation and association membership or coverage must not be conditioned on health status.

The bill was introduced on November 2, 2005, read twice by the Senate and referred to the HELP Committee where it awaits further action. The HELP Committee is expected to take further action on the bill in early 2006.

James C. Musser, Esq. is a legislative consultant based in Falls Church, Virginia. His reports are updated monthly.