Dear Community Friends:
As a co-sponsor of HB 4066, I am pleased to announce that we
just passed the following legislation. The bill has already
passed the Senate and now only needs to be signed by the
Governor. Once signed, this legislation will allow small
businesses, beginning January 1, 2009, to join together in an
effort to obtain private sector healthcare coverage.
Sincerely,
Rep. Donna Rowland
Current Law:
Today, Tennessee law allowing small employers to “pool together”
to negotiate and offer health insurance through a larger group
is fairly restrictive. Under the law, which emerged from
efforts in 1992 and 2000, associations that have been in
business for a minimum of five years may form self-funded health
insurance groups. The law has done little to encourage
small-group health cooperatives; only one group exists today.
Proposed Change:
The bill would encourage more small employers to form health
group cooperatives prudently. The Tennessee bill would define a
health group cooperative as a private purchasing cooperative
that contains at least 1,000 employees OR has at least 10
participating employers. The cooperative would include
employers with no less than two and no more than 50 employees.
Membership is voluntary but participants must commit to
purchasing coverage of fully funded plans through the
cooperative for five years, ensuring pool stability. A
cooperative must operate as a nonprofit and must register and
demonstrate continued compliance with the Department of Commerce
& Insurance, among several stipulations.
Reason for Change:
Frankly, small employers and their employees are floundering in
today’s health insurance market. A recent NFIB/TN member survey
found only 45% of NFIB/TN members offer health insurance today,
compared to 70% of NFIB/TN members 15 years ago. Small-business
owners are looking for improvement in the health insurance
market, including:
-
Better predictability of rate increases
-
Avoidance of a catastrophic illness that knocks them out
of the market or cripples their business
-
More choices and market-based solutions to compete with
big business for labor
Clearly, not all participants of a pool will see rate decreases;
however, they will gain better predictability that allows them
to plan and have greater peace of mind to grow their businesses.
