Small Businesses May Find Health Insurance Relief Through Bipartisan Bill

by Lesley Politi on February 9, 2009

Small Businesses May Find Health Insurance Relief Through Bipartisan Bill


Feb. 6, 2009

Rob Kuznia–


A bill introduced this week by a bipartisan pair of Congressional lawmakers would allow small businesses and self-employed individuals burdened with the high cost of health insurance to pool their resources for the purpose of negotiating better rates for their employees or themselves.

Authored by Rep. Nydia Velazquez (D-NY) and cosponsored by Rep. Sam Graves (R-MO), the “Small Business CHOICE Act” would entail forming insurance cooperatives that would function similar to risk pools.

As it is, only about a third of American businesses with 10 or fewer employees offer health benefits, while nearly all large employers provide their workers with some form of coverage, said Velázquez, the Chairwoman of the House Small Business Committee, in a statement.

Eligible cooperatives would have to include a minimum of 100 small businesses, or 5,000 employees.

“For small businesses already under great financial strain, the rising cost of health care simply adds more pressure,” Velazquez said. “We cannot expect our small businesses to play their traditional role as drivers of the economy and lead our nation’s recovery when crushing healthcare costs prevent them from bringing on new employees.”

Velazquez, who in July introduced a version of the bill, added that, in the last two years, healthcare costs have risen at twice the rate of inflation, jumping 80 percent since 2000 for small firms.

“Countless businesses have been forced to scale back their workforce,” she said. “With unemployment at a 16-year-high, we simply cannot afford to lose more small business jobs.”

Graves, Ranking Member of the House Small Business Committee, said the bill is a “crucial” step toward ensuring that more Americans obtain health insurance.

“The effects of this bill will mean fewer Americans are without health-care coverage and small businesses can worry about one less factor when making hiring decisions,” he said.

Money from the insurance cooperatives could be used to provide insurance against high-cost or catastrophic claims.

The bill also would offer a tax credit of 65 percent for participating businesses, as well as allow self-employed individuals to save up to $5,000 yearly on health-coverage costs, according to the statement.

The acronym of the bill, which was introduced Thursday, stands for “Cooperative for Healthcare Options to Improve Coverage for Employees.”



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