June 13, 2008
This week, a bipartisan group of members, including Reps. Ron Kind (Wisc.), Phil English (Pa.), John Barrow (Ga.), Bill Young (Fla.), Russ Carnahan (Mo.), Jo Ann Emerson (Mo.), Tom Allen (Maine), Jim Gerlach (Pa.), Jason Altmire (Pa.), Christopher Shays (Conn.), Joe Courtney (Conn.) and Jim Ramstad (Minn.) introduced H.R. 6210, the Small Business Health Options Program (SHOP) Act. The Senate version of the bill, S. 2795, was introduced by Sens. Durbin (Ill.), Snowe (Maine), Lincoln (Ark.) and Coleman (Minn.) in April.
The SHOP Act makes health insurance more affordable, predictable and accessible for small businesses (with up to 100 employees) and the self-employed. The legislation offers tax incentives to encourage states to fix poorly functioning small group insurance markets and creates state purchasing pools supported by a voluntary, nationwide pool. NFIB strongly supports this legislation.
NFIB action
- NFIB President and CEO Todd Stottlemyer joined the lead sponsors of this legislation at a recent press conference to announce the bill’s introduction and NFIB’s support for their efforts.
- NFIB worked closely with the bill’s sponsors to craft meaningful legislation that would: (1) empower states to create purchasing pools for small business owners and the self-employed; and (2) create a nationwide small business purchasing pool.
- The National Association of Realtors and the Service Employees International Union support the SHOP Act; the National Association of Insurance Commissioners also worked closely with the bill’s sponsors and business groups in developing this legislation.
- In the coming weeks, NFIB will be working to build a coalition of support and add to the bipartisan list of co-sponsors, while encouraging action in the Senate.
SHOP details
- Beginning in 2009, employers with 100 and fewer employees and the self-employed can join a state purchasing pool and receive a tax credit (if their state chooses to adopt specific small group market reform practices).
- In 2011, small employers and the self-employed can join a nationwide SHOP pool to purchase health insurance (unless their state opts out after adopting insurance rating reforms and chooses to create its own purchasing pool).
- Also in 2011, insurance rating based on health status and claims experience will be prohibited in both SHOP and in the states’ small group market. This will help stabilize yearly premium increases and protect businesses from premiums that escalate simply because one employee suffers a major illness.
How does SHOP provide access to and choice of health insurance?
- SHOP and state purchasing pools will provide a voluntary, one-stop alternative to the bewildering, current market, with a web site providing information about the plans’ streamlined administrative efficiencies.
- SHOP will offer new private health plans that are available nationwide, in addition to plans that operate in a single state.
Who qualifies for the tax credits?
- A targeted, advanceable tax credit will be available to self-employed persons and small businesses (with up to 50 employees) entering either the state or national pooling arrangement, if the employer pays at least 60 percent of the premiums.
- Employers with 10 or fewer employees will receive $1,000 for each covered employee ($2,000 for family coverage), and the credit will be phased down as the size of the employer increases. Those who pay more than 60 percent of the premiums will receive a bonus.
Does SHOP respect state insurance laws and protect consumers?
- State insurance commissioners will ensure that all health plans in SHOP meet state requirements for financial solvency, network adequacy, and claims and appeal procedures and will also handle consumer complaints and ensure compliance.
- Plans in the nationwide pool will not be allowed to dictate prices and will accept all qualified plans that meet state licensure laws.
- With the exception for nationwide plans, benefit requirements will follow state laws;
- The nationwide plans will be required to meet standards developed primarily by the Institute of Medicine based on what is clinically appropriate, affordable and retains positive aspects of the small group market.
H.R. 6210 co-sponsors (as of June 13, 2008)
Reps. Tom Allen (Maine), Jason Altmire (Pa.), John Barrow (Ga.), Shelley Berkley (Nev.), Russ Carnahan (Mo.), Joe Courtney (Conn.), Charles Dent (Pa.), Jo Ann Emerson (Mo.), Phil English (Pa.), Bill Foster (Ill.), Jim Gerlach (Pa.), Ron Kind (Wis.), Don Manzullo (Ill.), Jim Ramstad (Minn.), Christopher Shays (Conn.), Albio Sires (N.J.), Frank Wolf (Va.) and Bill Young (Fla.).
S. 2795 co-sponsors (as of June 13, 2008)
Sens. Jeff Bingaman (N.M.), Norm Coleman (Minn.), Susan Collins (Maine), Amy Klobuchar (Minn.), Blanche Lincoln (Ark.) and Olympia Snowe (Maine).
