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Association health plan bill will help

Jackson-area media recently reported opposition by the MetroJackson Chamber of Commerce to The Small Business Fairness Act — legislation which is now under consideration in Congress.

I fear the chamber — which represents myriad small businesses in the metro area — is extremely short-sighted in opposing this measure that will allow small businesses and the self-employed to band together to purchase health coverage.

Allow me to share another perspective.

Confronting soaring costs

The Small Business Fairness Act was introduced by Senators Snowe (Maine), Talent (Missouri) and Bond (Missouri) in the Senate, and Congressman Sam Johnson (Texas) in the House. S. 406 and HR 525 would allow trade and professional associations to offer health insurance plans to their association memberships.

Small business owners cite rising health insurance costs as the primary factor leading them to discontinue coverage for employees. Association health plans (AHPs) can reduce health insurance costs by 15% to 30% by allowing small businesses to obtain the same economies of scale, bargaining clout and administrative efficiencies now only available to large employer and union plans.

In essence, this legislation would simply give Mississippi’s small business owners — the local florist, corner grocery or real estate firm — the same opportunities to participate in affordable group insurance plans for their workers that a national bank or national supermarket operating in Mississippi today already have.

Even the opponents’ studies have indicated that these plans could allow as many as 4.5 million uninsured workers to obtain insurance coverage.

Realty firms are the prototypical small business that could benefit from the creation of a new source of insurance coverage. Currently, well over 28% of all Realtors nationwide are uninsured and an additional 4% will soon lose what coverage they have. That is why the National Association of Realtors has joined together with the U.S. Chamber of Commerce, the National Federation of Independent Businesses and more than 160 other national organizations in supporting the Small Business Health Fairness Act.

Healthy competition

Despite arguments by Jackson chamber leaders to the contrary, insurers offering a fully-insured AHP would be subject to most state insurance laws — including consumer protections, rate review, third-party external reviews and solvency requirements — that govern any other insurance plan offered to residents of a given state. In addition, these plans would be prohibited from “cherry picking” the best risks and would be required to be open to any employer or self-employed individual who was a member of the trade association sponsoring the plan.

Unfortunately, it appears that those who offer existing programs don’t want to have any competition for the business of the firms that they currently serve. We believe that with choice comes increased competition and that it is the firms’ employees who will benefit from that competition.

A chamber spokesman quoted in The Clarion-Ledger implied that these plans could provide “bare-bones” coverage or a less than stellar product. But we know that it is only in the interest of any sponsoring trade group to offer a quality product. If we don’t, we lose the faith and trust of our members, and that is something that no voluntary trade organization wants to do.

On behalf of the 5,500-member Mississippi Association of Realtors, I urge Mississippi’s Senators Cochran and Lott and Representatives Wicker, Thompson, Pickering and Taylor to become cosponsors of this worthwhile piece of legislation.

R. Scott Brunner, CAE, is chief executive officer of the 5,500-member Mississippi Association of Realtors, the business advocate for real estate professionals in Mississippi.

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