Small Business Owners Urge Passage of Association Health Plans Legislation

Strategic Insights -

Small business owners, including Bill Fairchild, president of R.W. Murray Co., joined President George W. Bush in a discussion on the health care needs of small business owners and their employees. The event highlighted the importance of Association Health Plans (AHP) legislation, which would allow small businesses to pool together and purchase health insurance at a lower cost. Fairchild shared his firm's experience with AHPs, citing that their insurance premiums had increased from around $5,000 per employee to over $10,000 a year per employee in 2004. The president and the small business owners emphasized the need for Congress to pass AHP legislation to level the playing field with big businesses and labor unions.

Key Takeaways:

  • The number of Americans without health insurance increased by 5.7 percent in 2002 to 43.6 million, according to a 2003 report by the U.S. Census Bureau.
  • Small businesses obtaining insurance through AHPs can enjoy premium reductions ranging between 9 and 25 percent, estimated by the Congressional Budget Office.
  • Association Health Plans (AHP) legislation aims to provide small businesses with the same opportunities as big businesses, allowing them to share risk and purchase insurance at a lower cost.
  • The Associated Builders and Contractors (ABC) has offered health benefits plans to its member firms for over 45 years, but was forced to discontinue the insurance portion of the plan in 2000 due to incompatible state laws.
  • ABC has testified before Congress in support of AHP legislation and urges swift passage.

Statistics:

  • 43.6 million Americans were without health insurance in 2002, a 5.7 percent increase from the previous year (U.S. Census Bureau, 2003).
  • Premium reductions for small businesses through AHPs can range between 9 and 25 percent according to the Congressional Budget Office.
  • 23,000 merit shop construction and construction-related firms are members of the Associated Builders and Contractors (ABC).

Sources:

  • PRNewswire, "President Bush Emphasizes Importance of Association Health Plans for Small Business"
  • Associated Builders and Contractors, "ABC Testifies before Congress in Support of Association Health Plans Legislation"
  • U.S. Census Bureau, "Current Population Reports, P60-226, Health Insurance Coverage in the United States: 2002"
  • Congressional Budget Office, "Options for Paying for Association Health Plans"