N.H. Advances Small Business Health Reform

March 28, 2005

New Hampshire Gov. John Lynch’s plan to help small businesses facing stiff health insurance costs passed its first hurdle last week in the Senate.

The new plan steps back from reforms enacted just over a year ago under Senate Bill 110. The bill allowed insurance companies to look at a business’ location and worker health in setting premiums for companies with up to 50 employees.

This drove up costs for businesses with older or sicker workers and those in areas where health care costs are higher, such as the Seacoast.

An outcry from businesses hurt by the changes led to several proposals to reform the law this year. Lynch and several senators brokered the deal approved last week, though it will be sent to the Senate Finance Committee for further review.

A similar measure also won support from the House Commerce Committee.

Opponents argue the new plan will drive insurers from the state, giving businesses fewer choices and less competition.

But supporters say adding a new reinsurance pool will allow more companies to offer policies without fear that a single high-risk policy will put them out of business.

Under this proposal, insurers could not consider a business’ location or the health of its workers. Insurance companies still would be able to consider workers’ ages and their industries.

For potentially very expensive cases, insurers could pass certain workers into a reinsurance pool, which would be paid for with an assessment on all policyholders.

Under this plan, workers no longer would be required to fill out health forms before premiums are set. Forms would be filled out after policies were written so insurers could identify high risk workers for the reinsurance pool.

After the vote, Lynch praised Sens. Maggie Hassan, D-Exeter, and Ted Gatsas, R-Manchester, for working with him to draft the bipartisan plan.

“By passing this legislation, the Senate has taken an important step toward giving our small businesses the relief they so desperately need. This bill is a win for employers, for workers, and for our economy,” he said in a statement.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Topics Commercial Lines Business Insurance Small Business

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