The House introduced legislation Wednesday to help small business provide health insurance to their employees.
The bipartisan Cooperative for Healthcare Options to Improve Coverage for Employees" or Small Business CHOICE Act of 2008 would allow small businesses to form health insurance cooperatives to bring down costs.
The bill, sponsored by Reps. Nydia Velazquez (D-N.Y.), chairwoman of the House Committee on Small Business, and Joseph Pitts (R-Pa.), is designed to help millions of Americans gain healthcare coverage. It melds together elements from both presidential candidates' healthcare platforms, according to drafters of the bill.
According to Velazquez, the bill would help curb the rising costs of health insurance plans for entrepreneurs and lessen the volatility of premiums by adding incentives to help small firms expand coverage for working families. The bill could have a significant impact because small businesses make up 99 percent of all employers and more than 50 percent of the private-sector workforce, Velazquez said.
The CHOICE Act would provide employees with a refundable tax credit of 65 percent. It also would minimize risks for insurance companies by letting small firms pool their employees with those of other businesses in voluntary health cooperatives, allowing small businesses to negotiate for better rates. Self-employed individuals would save $5,000 per year on health coverage costs. Other small firms would save more than 34 percent, Velazquez said.
Richard Gaylord, president of the National Association of Realtors, hailed the bill for providing a way for self-employed individuals to gain coverage through co-ops. The association has 1.2 million members, most of whom are self-employed.
"The bill presents a new approach to the very challenging problem of coverage for the self-employed," Gaylord said.
Earlier this year, the House Committee on Small Business heard testimony on the variety of challenges small businesses face in making healthcare affordable. Witnesses at the hearing Ðsome of whom said they had been forced to change health plans three times in less than 48 months Ð said cost is a major concern, but not the only challenge.
"High premiums are a serious problem, but so are the less obvious costs faced by entrepreneurs looking to offer health benefits," Velazquez said. "When small business owners are forced to divert so much of their time and resources to dealing with this, it takes away from their ability to focus on growing their firms and driving the economy."
"American entrepreneurs should not have to choose between grappling with unreasonable obstacles and dropping their health insurance," Velazquez said.
The bill is supported by the American Optometric Association, International Franchise Association, U.S. Chamber of Commerce, National Association of Home Builders, National Association of the Self-Employed, National Federation of Independent Business and National Roofing Contractors Association.
Do you think small business healthcare cooperatives are a good idea? Let me know at Diana.Manos@medtechpublishing.com.