WASHINGTON, D.C. | March 8, 2017
When Obamacare was forced on the American people seven years ago, small business owners were concerned about how the law would affect their businesses and their workers. Over the years, many of those employers appeared before the committee, and we listened as their concerns over the law turned to stories about its consequences.
As one small business owner testified back in 2014, “the Affordable Care Act is anything but affordable for our company and employees.” In 2015, another small business testifying before the committee explained, “In addition to the challenges of record keeping, reporting, and other compliance issues, the looming unknown cost of insuring future employees has made me apprehensive of continuing to expand my business and hire new employees.”
The sad truth is that small businesses have been hit especially hard by the government takeover of health care. In fact, Obamacare has destroyed an estimated 300,000 small business jobs and forced an estimated 10,000 small businesses to close. Additionally, Obamacare’s costs and mandates have resulted in $19 billion in lost wages for small business employees.
These stories and statistics are bad enough on their own, but it’s also important to understand what they mean for workers’ health care. With more and more small businesses unable to offer coverage, more and more employees have fewer health care options. It’s not that these employers don’t want to provide health insurance for their employees. It’s that in the current environment, they simply can’t afford to do so.
While small businesses and their workers are not the only ones who have taken a hit, they have had a harder time mitigating the damage. For instance, large businesses and labor organizations are able to negotiate on behalf of their employees for high-quality health care at more affordable costs. Small businesses do not have the same bargaining power in the health insurance marketplace and are unable to band together to improve their negotiating position.
Additionally, by offering a self-insured qualified group health plan under the Employee Retirement Income Security Act — or ERISA — large employers and labor organizations are exempt from a maze of state rules and regulations related to health insurance. Small businesses, on the other hand, don’t have that option, and for an employer whose workers reside in different states, finding the right plan can be incredibly difficult.
That’s why Representative Johnson and I introduced H.R. 1101, the Small Business Health Fairness Act. The bill amends ERISA to allow small businesses to participate in association health plans — also known as AHPs. By banding together through AHPs, smaller employers can increase their bargaining power with insurance providers, putting them on a more level playing field with larger companies and unions. Employers will then be able to purchase high-quality health care coverage at lower costs for their workers. At the same time, the bill includes numerous provisions that will help ensure AHPs are solvent and working families are protected.
Small businesses deserve to be treated the same as large corporations and unions when it comes to providing their employees high-quality health care coverage. This legislation levels the playing field to ensure they are. In the end, it will lower costs for small businesses already facing limited resources, and it will help expand affordable coverage for working families who want to purchase health insurance through their employer. It is exactly the kind of free-market, patient-centered reform we promised the American people and one of many positive, commonsense solutions that will modernize our nation’s health care system.