Small Business Can’t Wait Longer for Affordable Health Insurance

By Jezree Friend

The recent economic shutdown proved just how valuable small business is to our communities. It also
shined a light on the disproportionate struggle employees and employers of small businesses face. My
job provides me regular communication with business across the state and recent events have increased
this interaction ten-fold. Due to supply chain disappearance and the economic fallout, employers still
operational are forced to prioritize between keeping all their staff employed or paying for health
insurance, and those are the lucky ones.

Health insurance has remained one of the highest costs of doing business for employers and small
businesses are hit worse. In fact, small businesses often pay up to 18 percent more than large to provide
health insurance for their employees. This is in part because large employers have the economy of scale
to negotiate lower premiums, administrative costs, and often have more stable risk profiles.

As well intentioned as the drafters of the Affordable Care Act (ACA) were, we cannot ignore that in the
first five years after its implementation, 25 percent of small businesses providing health insurance were
no longer financially able to provide this benefit. The ACA unreasonably burdened the small group
market and health insurance costs on small business have grown significantly.

Currently, 30 states provide relief for small business to purchase health insurance through an
association health plan (AHP). These AHPs allow small business to aggregate together and purchase
health insurance on the large group market the same way large employers currently do. Pennsylvania’s
Senator Michele Brooks and Representative Valerie Gaydos, along with bipartisan support from
leadership in both parties, have introduced Senate Bill 993 and House Bill 2200, respectively. When
passed, this legislation would give small business and their employees the same advantage as large
employers.

The bipartisan legislation will: provide comprehensive coverage; protect people with pre-existing
conditions; not impact the health coverage people currently have; provide coverage for tens of
thousands of people without health insurance; provide for essential health benefits.

As other states implemented these small business provisions, the nonpartisan Congressional Budget
Office (CBO) conducted an analysis in 2019. The CBO’s study determined, once implemented, roughly 1
million people nationally enrolled in health insurance coverage under an AHP will be newly insured for
the first time. Additionally, premiums are estimated to be 30-perecnt lower for small businesses and
their employees.

This is obviously a no-brainer for legislators supportive of small business employees, but this is urgent
now. Allow me to explain.

When an employee becomes unemployed, they are given the option to elect an individual health
insurance plan through the Exchange. The problem is, those small businesses who can’t afford the high
cost of health insurance, or employees who have only been partially laid off, aren’t allowed to use the
Exchanges. That’s the case for many of the 1,134,053 Pennsylvanians who filed for unemployment
benefits due to the statewide business shutdown between March 15 and April 6 alone. For comparison,
in the three-week period prior, that number was just 40,000.

This is particularly concerning since the cause of their unemployment and subsequent inability to secure
health insurance is the product of a growing health crisis when coverage is needed most. We can all
agree providing coverage for our neighbors without health insurance for the first time, while affordable
for small business, is a win-win.

We share the governor’s concern for the health and safety of Pennsylvanians. However, in uncertain
times, well-intentioned, hasty decisions can do more harm than good. It is imperative Pennsylvania
immediately prioritize this legislation. Failure to miss this window will continue to increase the number
of Pennsylvanians without health insurance coverage and fail to provide relief to small business during
this unprecedented time.

Jezree Friend is the Manufacturer & Business Association’s (MBA) senior government relations
representative and can be contacted at [email protected]. Founded in 1905, the MBA has over 3,000
members representing over 120,000 employees across 54 counties in Pennsylvania. The MBA is
dedicated to helping employers face challenges by delivering services that lower the cost of doing
business, ease the burden of compliance and increase productivity for its members. www.mbausa.org