U.S. House Small Business Committee introduced a bill that would allow small businesses to form cooperatives to purchase health insurance
24 07 08 - 12:50
Small businesses could gain insurance options
BY ANDI ATWATER - The Wichita Eagle
The U.S. House Small Business Committee on Wednesday introduced what it calls a landmark bill that would allow small businesses to form cooperatives to purchase health insurance.
Called the Small Business Cooperative for Healthcare Options to Improve Coverage for Employees Act of 2008, the bill helps small businesses offer health insurance to employees through health insurance pools and a refundable tax credit of 65 percent.
Committee chairwoman Nydia Velazquez said the act affords employers flexibility and purchasing power.
"Small businesses should not have to choose between providing health benefits to their employees and keeping their doors open," Velazquez said in an e-mail. "The CHOICE Act will lower premiums while giving entrepreneurs the flexibility they need to ensure millions of Americans have access to health coverage."
The tax credit is a key component.
The credit would be available to businesses with up to 100 employees and require:
• Employers to offer a small-business wellness program
• A bonus tax credit of 5 percent for employers who did not previously offer subsidized health insurance
• Employers to subsidize at least 65 percent for individual coverage and up to 35 percent for family coverage
"The bill is a means to an end," said Jaime Zapata communications director for the U.S. House Committee on Small Business. "It has both tax elements and a pooling mechanism. Unlike other legislation, however, the CHOICE Act creates a cooperative that can work within existing state law."
Tim Witsman of the Wichita Independent Business Association said he believes tax credits are part of the solution, but he's not so sure the pooling concept works.
It's a concept that's been tried before and rates just don't come down, he said.
"Health care costs for one kind of industry are different than for another," he said. "Who usually ends up joining it? Those who have high costs and trouble joining elsewhere. It sounds good... but these are the kinds of things that happen."
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