THE PRIMARY REASON that the contracting industry should support association health plans is that they would help to make health insurance more affordable for companies that belong to trade groups such as the Plumbing-Heating-Cooling Contractors - National Association. By allowing association members to pool their resources to obtain coverage at a lower cost, AHPs would benefit the employees and families of contractors, particularly in smaller firms.
Another reason why AHPs are a good idea is this: By allowing more contractors to offer health insurance as an employee benefit, they would help our industry attract more qualified workers. Besides an interesting job and good working conditions, people of all ages expect good wages and benefits from their employers. Attracting young people to the plumbing-heating-piping industry is particularly tough when contractors can’t offer benefits that match other industries.
When we last did our last comprehensive survey five years ago of the benefits offered by contractors, almost half of the contracting firms with fewer than 10 employees did not provide medical insurance. Less than 15% of these firms offered dental insurance.
With the spiraling cost of health care in the past five years, we can’t imagine that the situation for smaller contractors has improved much. In fact, smaller firms of all types have been hit harder by rising health-care costs than larger companies have.
AHPs would allow small business owners to band together through their associations across state lines to purchase group health insurance. In effect, they would allow members of a trade organization to create the same type of group health plan as a Fortune 500 corporation or a labor union.
Legislation that would allow the formation of AHPs is now before Congress. The law would allow trade associations, such as PHCC-NA, to set up their own group health insurance programs. Trade groups wouldn’t be required to establish their own health insurance programs, and their members wouldn’t be required to join.
Having passed the House, the Small Business Health Fairness Act of 2003 now faces a debate in the Senate. President Bush has indicated that he would sign the bill into law if it makes it through Congress.
Passage is not assured, however, at least not this year. Insurer Blue Cross/Blue Shield, which views AHPs as competition, opposes the bill. In addition, some legislators oppose AHPs on ideological grounds: Conservative senators believe that health insurance prices should be determined by the free market; liberal members want a national health care plan.
Now is not the time for ideologues from either party on this issue, not with millions of Americans going without health insurance. As many as 8.5 million workers who do not have health insurance would receive coverage with AHPs.
And while we’re certainly aware of the predicament that the insurance industry is in these days, perhaps large health-care insurers could use some competition in providing coverage to the nation’s uninsured. Besides, Blue Cross/Blue Shield and other heath-care insurers stand to benefit from AHPs, many of which will need their services to administer the programs.
We’re accustomed to hearing at contractor meetings that two of the biggest issues you face are rising insurance costs and the difficulty of attracting qualified people. Association health plans will not eliminate either problem, but they do offer a workable way for more contractors to provide health insurance. As more contractors offer medical coverage as a benefit to employees, these firms become more attractive to a larger circle of people.
It goes without saying that to take advantage of AHPs, you have to belong to a trade group that thinks these plans are worthwhile. The next step is to work with your trade association to put pressure on legislators to pass the law to enact AHPs.
If you’re not a member of such a group, you should give serious consideration to joining one if rising health-care costs and shorter lines of job applicants are important to you.