Small Business Health Fairness Act of 2005 (H.R. 525)

On July 26, 2005, the House passed the Small Business Health Fairness Act of 2005, which would prevent states from applying insurance regulations and consumer protection laws to certain health insurance plans offered by trade and professional associations.

Under current law, trade and professional associations may offer health insurance plans to small employers who are members of the association. These plans are regulated by the states and must abide by all applicable state laws. State laws and regulations often protect individuals and small groups from unlimited insurance premium increases, allow the right to external review in the case of denied claims, and minimize the likelihood of fraud and abuse. State laws also ensure access to important health services, such as access to mammography screening, emergency services, maternity care for expectant mothers and well-baby care for infants.

H.R. 525 provides that Association Health Plans (AHPs) certified by the Department of Labor would be exempted from state regulations and consumer protection laws. AHPs would have sole discretion to select specific items and services to be covered, potentially refusing coverage of important preventative health services.

The National Governors’ Association wrote that this bill would “undermine our efforts” to ensure that affordable health insurance is available. In addition, the AHP legislation would replace state oversight with minimal regulatory authority by the U.S. Department of Labor, which, the National Governors’ Association states, “has no capacity for regulating insurance arrangements.”

Sources:
* BlueCross BlueShield Association, Association Health Plans: No State Regulation Means Loss for Protections for Consumers, Small Employers, and Providers (May 2005).
* Minority Staff, Committee on Education and the Workforce, Minority Views: Small Business Health Fairness Act of 2005 (Apr. 12, 2005) (http://edworkforce.house.gov/ democrats/hr525views.html).
* Letter from Governors Mark R. Warner and Mike Huckabee of the National Governors Association to Majority Leader Frist and Minority Leader Reid (Mar. 28, 2005).