In June 2018, the U.S. Department of Labor published a final rule creating a new pathway for small businesses to participate in association health plans. This rule means that small business owners, employees of small businesses, family members of working owners/employees can band together to purchase coverage. Participation in association health plans can means increased coverage options, more affordable pricing, enhanced ability to self-insure, less regulatory burden and complexity, and lower administrative costs.
Association health plans (AHPs)are group health plans that employer groups and associations offer to provide health coverage for their members’ employees. They allow small employers who join together as associations, to take advantage of the regulatory and economic advantages available to large employers. Participation in an AHP means that members’ employees become part of a larger group, allowing the risk to be spread across more individuals rather than just the employees of a specific business. Individual health insurance premiums are lower and benefits are better when more people are covered under a plan.
However, in Maryland, small business employees are being denied true participation in AHPs. In essence, the State is discriminating against small businesses and their owners, employees and family members.
During the 2018 Legislative Session, the General Assembly passed the Maryland Healthcare Access Act of 2018. The act included language that prohibits small business’s owners, employees and family members from inclusion in the pool of an AHP. This act must be amended to allow small businesses full participation in AHPs.
Small businesses are the backbone of our economy and it is imperative that Maryland create a climate that nurtures business growth and allows small businesses to thrive. This includes keeping the cost of doing business in check. While not required, many small businesses provide health insurance to their employees as a way to retain a quality of workforce. These businesses should have access to the same group health insurance options as larger businesses, and as a way to compete with businesses in neighboring states such as Virginia.
Fifteen million Americans who work for a small business or operate a sole proprietorship, and their families, lack health coverage. Four million Americans, including 400,000 who otherwise would lack insurance, will join an AHP by 2023 according to Congressional Budget Office estimates.
I am pleased to report that, due to the efforts of the Maryland Chamber of Commerce Executives of which I am an Executive Board Member, Senator Edwards has sponsored SB 0665. The bill is for the purposes of:
• Clarifying that, for purposes of provisions of law concerning health insurance, a chamber of commerce may be considered an association;
• Repealing certain provisions of law that apply certain provisions of law governing small group market plans to health benefit plans offered by certain entities; and
• Applying the Act to policies, contracts, and health benefit plans issued, delivered, or renewed in the State on or after January 1, 2020.
I will make periodic updates on the progress of this proposed piece of legislation. The full bill is available to be viewed at http://mgaleg.maryland.gov/2019RS/bills/sb/sb0665f.pdf
