Here's what the National Association of Realtors is Telling its Members about SBHP's

SMALL BUSINESS HEALTH PLANS

ISSUE: Many of America's 45 million uninsured citizens are self-employed or work for small employers that cannot afford to offer health insurance benefits. Small businesses are generally unable to achieve the efficiencies that allow large group rates comparable to those available through a union or large employer plan. A broad coalition of small business organizations, including NAR, has advanced proposals for a new market tool for small businesses. This new concept would permit associations to provide health insurance coverage to their members through small business health plans (SBHPs), also known as association health plans (AHPs). SBHPs would be subject to the same federally-prescribed rules (ERISA) and the same state regulations that govern large corporate and union health plans, making SBHPs exempt from complying with multiple state-mandated coverage requirements. This exemption would allow SBHPs to uniform plans regardless of where subscribers reside. Small businesses could band together, thus increasing their power to bargain with health insurance providers and lower overhead costs by as much as 30 percent.

NAR POSITION: NAR supports efforts to allow bona fide associations to offer uniform health insurance coverage plans exempt from costly state-mandated coverage provisions.

OPPOSING VIEWS: Insurers that currently dominate the small business and individual insurance markets have traditionally opposes SBHPs. State insurance commissioners believe SBHPs would limit their oversight. Others charge that SBHPs will create "second-class" of health insurance, "cherry pick" the best risks from the pool of individuals currently insured by individual policies and leave the individual market with only the worst risks.

IMPACT ON REALTORS®: Access to affordable health insurance has increasingly become an issue for NAR's members. In 1996, 13% of Realtors were uninsured; by 2004, 28% had no health insurance. SBHPs could enable real estate associations and real estate companies to make health insurance available.

STATUS/OUTLOOK: On Wednesday, March 15, 2006, the Senate Health, Education, Labor and Pensions (HELP) Committee approved S.1955, the Health Insurance Marketplace Modernization and Affordability Act of 2006. Cosponsored by Senators Enzi (R-WY) and Ben Nelson (D-NE), the bill authorizes the creation of fully-insured small business health plans (SBHPs) by trade associations. The bill passed the Committee on a party-line vote of 11-9.

The Committee began consideration of the bill on March 8th but failed to finish due the need to deal with sixty-eight amendments offered by the Democrats. This was the first time in the 11 year history of small business/association health plan legislation that the Committee has voted on a SBHP bill.

In preparation for the Committee vote, NAR conducted a fly-in of Federal Political Coordinators for Senators serving on the HELP Committee and issued a targeted Call for Action to REALTOR® members in those states represented by Senators on the HELP Committee the week of February 27th. In addition, state association leaders visiting Senate offices in DC this month were also asked to solicit their Senators' support for the amended bill. State associations in those states with insurance commissioners opposed to S. 1955 are being asked to contact their commissioners and urge them to reconsider their opposition.

In anticipation of Senate floor consideration, NAR staff has begun to roll out the next phase of a multifaceted advocacy program. Given the number of amendments offered and the strict party-line vote, it is very clear that a successful floor vote will be very difficult. NAR is committed to using the resources necessary to wage this battle in the Senate.

Once approved by the full Senate, a House-Senate conference will be necessary to resolve the differences between S. 1955 and the House SBHP measure, HR 525, approved on July 26, 2005 on a bipartisan vote of 263-165.

S. 1955 is the result of HELP Chairman Enzi's belief that Republican and Democratic opposition to S. 406, the Small Business Health Fairness Act, previously introduced by Senators Olympia Snowe (R-ME) and Robert Byrd (D-WV), is sufficiently strong to prevent S. 406 from moving successfully through the Senate. Building on S. 406's basic small business health plan (SBHP) concept, S. 1955 does not allow S. 406's self-insured SBHPs, authorizes the creation of only fully-insured SBHPs, requires SBHP insurers to be licensed in every state in which they operate and places the regulatory authority over SBHPs with the state insurance commissioners. In addition, the bill established a process for harmonizing state regulations dealing with the administrative processes of regulating insurers, i.e. rules governing form filing, rate filing, etc.

Prior to and following the introduction of S. 1955 in November, Senate Majority HELP staff held weekly meetings with the major stakeholder interest groups to develop mutually agreeable compromises to provisions of the bill identified by each group as problematic. The four stakeholder groups included the SBHP Coalition, the National Association of Insurance Commissioners, Blue Cross Blue Shield Association and America's Health Insurance Plans association. At these meetings, the SBHP Coalition was represented by NAR, the National Federation of Independent Business, the U.S. Chamber of Commerce and the Associated Builders and Contractors. These talks proved productive and a much-amended version of S. 1955 as introduced was approved by the HELP Committee.

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CONTACT: Marcia Salkin 202-383-1092