Update On Association Health Plan Legislation

By Marian J. Marshall

There has been substantial activity in the Senate on AHPs over the last two weeks. Senator Chuck Hagel (R-NB) signed on as a cosponsor and it appears that the Senate Health, Education, Labor and Pensions (HELP) Committee, chaired by Senator Mike Enzi (R-WY) has finally gotten serious about moving some form of AHP legislation. Late last week, Senator Enzi circulated a draft of his health insurance reform bill. It consists of three major components (1) "Small Business Health Plans" (another name for AHPs); (2) "Near-term Market Relief" (insurance market reform that would apply to SBHPs and the broader small group market in the short term); and (3) "Regulatory Harmonization" (long-term market reform aimed at obtaining greater uniformity in health insurance markets). Although it is not critical to MCAA, Senator Enzi's proposal does not contain a self-funded option for AHPs. In fact, another major component of the bill is a requirement that SBHPs must offer any given benefit that is mandated in at least 45 states. The mandates requirement is likely to increase plan costs, but there's little chance of enacting a bill without it. I've attached a summary of the Enzi bill, so please let me know if you have any comments.

Because Senator Enzi is the chairman of the HELP Committee, his proposal is the most likely to move forward for full Senate consideration. However, Senators Snowe and Talent have also been working very quietly with Senator John Kerry (D-MA) on a compromise AHP bill that could possibly receive broad bipartisan support in the Senate. A summary of this proposal is attached as well. Basically, this approach combines the core elements of S. 406, with both fully-insured and self-funded AHPs, albeit with significant changes from S.406 aimed at addressing opponents' concerns, along with Senator Kerry's idea of establishing regional health insurance pools that are regulated by the states and are open to all small businesses.

It is unclear at this point as to when Senator Enzi plans on bringing the bill before the HELP Committee. If we are to get a bill enacted into law, we will have to compromise in several areas. However, it is important to keep in mind that we have stronger allies in the House, so once a conference is convened to iron out the differences in both bills it is conceivable that we'll have a greater shot at retaining many of the key components of the original AHP bill.

If you have any questions or comments, please let me know.