Kind-John Small Business Health Pooling Proposal
Posted June 3, 2004
Source:  Office of Rep. Ron Kind

The Small Employers Health Benefits Program (SEHBP) Act of 2004

Offering Affordable Choices for Small Businesses

Congressmen Ron Kind and Chris John

 

Lower Costs for Private Health Insurance

•         Affordability in the small group insurance market is a big challenge for small businesses across America.  The new SEHBP program will offer small employers affordable choices among private health insurance plans by giving them access to a large purchasing pool and negotiated rates. 

 

•         Allowing small businesses to band together nationwide in SEHBP will give them access to health insurance rates similar to or better than those available to large companies.

 

•         Small employers would also receive an annual tax credit to defray part of the employer contribution for low-income workers and a bonus tax credit for paying a higher percentage of the premium.

 

Nationwide Availability

•         Based on the successful Federal Employees Health Benefits Program (FEHBP), which offers members of Congress and government employees an array of private health insurance options, small businesses would have access to fee-for-service options, PPOs, and HMOs.

 

•         Every small business, rural or urban, would have access to a choice of plans.

 

•         Workers who move from one SEHBP-participating company to another anywhere in the country would be able to maintain their same coverage.

 

Consumer Protections

•         Plans participating in FEHBP are subject to strict regulatory and solvency standards, and are audited annually.  The same would apply to insurers in the new SEHBP.

 

•         Statewide plans in FEHBP are required to offer state-mandated benefits.  The same will apply to SEHBP plans.

 

Promotes Private Sector Competition and Consumer Choice

•         This bill does not promote government-run health care but harnesses the power of market competition to bring down health insurance costs, using a proven government negotiator.

 

•         188 private insurance plans participated and competed to be in the FEHBP in 2003.

 

Low Administrative Costs

•         Employers spend significant time every year comparing insurers and negotiating contracts.  Under SEHBP, a proven government negotiator would bare the burden of comparing benefit packages and costs, and negotiating contracts.

 

Maintains Employer-Based System

§         SEHBP will help maintain the employer-based system of health insurance.