The Mission Center

House Passage of Legislation Allowing States to Eliminate Small Group Market Expansion Disappointing News for Small Businesses

October 2, 2015 Posted by The Mission Center - No Comments

From Small Business Majority

Statement by John Arensmeyer, Founder & CEO of Small Business Majority, on today’s passage of the Protecting Affordable Coverage for Employees Act—legislation that allows states to decide whether to expand their small group markets in 2016 to include firms with 50-99 employees

We’re disappointed the U.S. House of Representatives passed the Protecting Affordable Coverage for Employees Act today, which allows states to determine whether to expand their small group market and the Small Business Health Options Program (SHOP) to small firms with 50-99 employees in 2016. Expanding the small group market next year would increase the size of the insurance pool, which benefits the healthcare system overall. What’s more, it would increase the number of lives eligible for the small business health insurance marketplaces, which is good for businesses and the success of SHOP.

We believe doing away with the healthcare law’s requirement that all small group markets expand to include 50-99 employer firms is detrimental to SHOP and small businesses looking forward to this option. We know from our research that many small business owners struggle to offer health insurance to their employees due to cost. In fact, Small Business Majority’s scientific opinion polling found the majority of small business owners provide insurance to at least some of their employees, but of those who don’t offer it, 70 percent say it’s because they can’t afford it. Small businesses have been waiting for decades for something to help bring down their costs, and the 2016 expansion to all small firms with 50-99 employees will help more small businesses find affordable health coverage.

Some have said that requiring 50-99 employer firms to offer coverage next year would be harmful to those businesses; however, 96 percent of businesses with more than 50 employees already offer health insurance to their employees. Allowing all small businesses to enter the small group market in 2016 can offer a wealth of benefits, both to firms that already offer health insurance and those shopping for coverage for the first time. These employers would no longer be charged more for insurance based on the gender or health status of their workers, and new limits would be in place to control how much more a business can be charged for its older workers. Additionally, employers can have peace of mind knowing each insurance plan in the small group market covers all essential health benefits.

What’s more, small group expansion has the potential to bring a wave of growth next year to the small business marketplaces, which is crucial for the success of SHOP. As many of these businesses already offer health insurance benefits to their employees, these firms have a higher incidence of both employer and employee familiarity with health insurance.

We want all small businesses to be able to enjoy affordable and comprehensive health insurance coverage, and an expanded small group market can help small businesses achieve that. We urge states to move forward with small group expansion in 2016 and help more small employers afford to offer health insurance to their employees.