Group health insurance bill helps small businesses

Small businesses across the state may feel the positive repercussions of one of the final acts of the 2006 legislative session — the passing of House Bill 1827, which assists small businesses in providing health insurance for their employees.

On July 14, Gov. Matt Blunt signed the group insurance bill into law in Springfield. It establishes new rules for group health insurance coverage issued to associations representing large and small employers and reduces the membership requirement from 100 to 50.

According to the Missouri Division of Employment Security, nearly 88 percent of Missouri’s workers are employed by small businesses that have 25 employees or fewer. Because they make up the largest segment of the uninsured and underinsured population in the state, associations have been exploring a wide variety of options for insurance pooling to reduce reliance on the state’s Medicaid program.

The group insurance bill, HB 1827, sailed through the legislative process and was supported by health care insurers United Health Care, Mercy Health Plans and Coventry.

This most recent solution was modeled after the Southwest Area Manufacturers Association (SAMA) I Health Care Consortium, which was developed last year with a waiver from the Missouri Department of Insurance. It was the first waiver granted in Missouri’s history allowing small employers with three to 25 employees the opportunity to join larger employers and purchase health care under a single rate structure.

The success of the model led the Missouri Department of Insurance to assist in drafting the language for HB 1827 as well as testifying in support of the group insurance bill before the Senate Small Business, Insurance and Industrial Relations Committee.

“The consortium model we use is designed to avoid companies leaving as soon as they find better rates elsewhere,” SAMA executive director Rita Needham said. “Companies make a three-year commitment to one another to stay in the consortium because they understand the value is in the long-term rate stability that will more likely occur in the consortium than if they are on their own.”
The process of organizing the consortium took a year because of the amount of education required for companies to understand the various elements of the model. SAMA has begun work on forming the SAMAII Health Care Consortium. An estimated 50 companies have expressed initial interest.

In October 2005, Associated Industries of Missouri unveiled AIMCare, an insurance program that uses AIM’s 1,200 member businesses to provide small businesses with the same buying power as a large corporation when purchasing insurance.
More than 600 Missouri businesses have requested a quote from AIMCare, of which 35 percent had not previously provided health insurance to their employees, according to AIM.

“The need to make health insurance available and affordable is an issue that crosses all party lines, all socioeconomic boundaries and affects every Missouri citizen,” said Jim Kistler, executive vice president of AIM. “No one option will cure the health care crisis, so we need to encourage creative solutions in the marketplace.”

Kistler also said that AIM is “encouraging the General Assembly and Governor Blunt to consider full tax deductibility for health insurance premiums and out-of-pocket medical expenses for both employers and employees. This should also assist small employers in their effort to move works from Medicaid to private insurance.”