House Bill Threatens Small Business Owners and Employees

Tim Wilkins

The “Small Business Health Fairness Act” rolls back the reliable and affordable health care small businesses have enjoyed since the passage of the Affordable Care Act ten years ago.

“The proposed legislation could expose employers and employees to financial ruin,” says Amanda Ballantyne​, National Director of the Main Street Alliance, in an open letter to the members of the House Education and Workforce Committee.

Main Street Alliance is a strategic partner of People’s Action, which also opposes the bill.

The act, formally known as House Resolution 1101, is currently under consideration in the House. It rolls back protections for small business owners and workers which were enacted under the Affordable Care Act.

Prior to the ACA, small business owners paid substantially more on average for health coverage and received fewer comprehensive benefits than larger companies. They also experienced broad unpredictability in costs, with premiums varying wildly from year to year.

H.R. 1101 weakens the protection of small businesses by allowing small employer groups and individuals to obtain health insurance through an unregulated association health plan (AHP), rather than through than the ACA’s larger pools. These protected small businesses from sharp swings in their rates based on the health of a few employees.

“The proposed legislation would allow employers with younger, healthier workforces to withdraw their employees from a state’s small group market, thus leaving behind small businesses with older and sicker employees,” said Ballantyne.

Unlike other insurers, AHPs are also not subject to state solvency requirements that would require them to have sufficient resources to prevent financial failure. This could mean millions of small businesses and their workers would lose their health coverage if AHPs experience bankruptcies.

“While AHPs may save money in the short-term by avoiding costs of consumer protections,” says Ballantyne, “enrollees would receive less robust coverage and may be left without important protections right when they need them the most.”

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