Back in mid-March, the North Carolina Senate passed SB 86, the Small Business Health Care Act. This bill would create the opportunity for easy formation of large group health plans among employer members of an association which can include small businesses and sole proprietors. Today, the bill will be heard on the floor of the House after advancing out of the Rules on Tuesday.
Often small businesses and sole proprietors don’t provide insurance, struggle to afford insurance, or would like a different choice of a plan compared to those offered on the ACA exchanges. Passage of this bill will provide great relief to small businesses across the state. The National Conference of State Legislatures found that on average, small businesses pay 8%-18% more for the same health plans compared to large group plans.
Despite claims from critics that these plans will offer bare-bones coverage, the reality is the plans that have been set up have been offering robust coverage, comparable to those plans that are offered on the ACA exchanges. Besides, these plans would have to comply with the regulations and protection that all current large group plans do, including one’s currently operating in this state. That means they cannot deny people enrollment based on health status or medical conditions.
The CBO has reported that the impact on the individual market will be minimal to nonexistent. A Foundation for Government Accountability study estimated that as much as 110,000 North Carolinians could benefit from the opened access to this new type of large group insurance.
The creation of new pathways for small businesses and sole proprietors to band together and purchase large group plans is inappropriately demonized as some attack on North Carolina’s health coverage. There are no mandates in this bill requiring businesses to offer this type of coverage nor join an association health plan. The bill has been supported by the NC Realtors Association, NC Retail Merchants Association, NC Farm Bureau, and the NC Restaurant and Lodging Association. Each of these well-respected trade groups feels the need to offer coverage under an association health plan to their employer members. This bill would create the opportunity for small businesses to look elsewhere for insurance beyond the limited number of cookie-cutter plans the ACA offers this population.