HB 1827 -- GROUP HEALTH INSURANCE

SPONSOR:  Wasson

COMMITTEE ACTION:  Voted "do pass" by the Committee on Small
Business by a vote of 11 to 0.

For health insurance plans issued to an association covering both
small and large employers, this bill allows the difference in
premium rates charged between similar classes of business to
exceed 20% if the Director of the Department of Insurance
determines it would be in the public's interest.  The director
may also approve additional classes of business if the plan is
underwritten and rated as a single employer, has a uniform health
plan design, is guaranteed issuance to all members, and complies
with all other federal and state insurance requirements.  The
bill also reduces the membership requirement from 100 to 50
members for policies issued to associations.

FISCAL NOTE:  No impact on General Revenue Fund in FY 2007, FY
2008, and FY 2009.  Estimated Income on Other State Funds of $0
to $5,000 in FY 2007, $0 in FY 2008, and $0 in FY 2009.

PROPONENTS:  Supporters say that the bill is a model that has
been used in southwest Missouri where larger and smaller
manufacturing companies joined in a consortium after receiving a
waiver from the Department of Insurance.  The businesses expect
to save up to 40% on their health insurance premium rates and
have stability on future rates.  The bill allows pooling of large
and small businesses and could be cookie-cut across the state for
various groups.  The bill is good for small business because it
allows collective purchasing and negotiating power to obtain
healthcare for employees where insurance was not affordable.
Statistics show that 60% of uninsured workers are employed by
small businesses.  Healthcare insurance and workers' compensation
are two of the top challenges for businesses.  Businesses are
finding both accessibility and affordability of healthcare
difficult to obtain.  The bill is another way to provide group
healthcare, enabling businesses to attract and retain quality
employees.  Businesses in the consortium design their own
insurance plan and are committed to the plan for three years.  By
reducing medical costs within the consortium through education
and wellness programs, premiums remain lower.

Testifying for the bill were Representative Wasson; Southwest
Area Manufacturers Association; Jenkins and Associates; Mercy
Health Plans; Greg McVay; Gary Moss; John Gentry; Coventry Health
Care; and National Federation of Independent Business.

OPPONENTS:  There was no opposition voiced to the committee.

Karla Strobel, Legislative Analyst

Missouri House of Representatives
93rd General Assembly, 2nd Regular Session
Last Updated November 29, 2006 at 9:44 am