Labor Secretary Affirms Bush Support on Health Legislation

August 8, 2002

U.S. Secretary of Labor Elaine Chao has affirmed the Bush administration’s support for legislation permitting small employers, working through trade associations, to jointly acquire health insurance for their employees.

According to Chao, association health plans, exempt from state insurance company licensing requirements, but still needing to meet certain federal standards would give small businesses the same bargaining power, administrative efficiencies and benefits of risk pooling through their association that presently exist for both large employers and union-sponsored plans.

The House of Representatives, as part of patient protection legislation, has given the okay to AHPs, but the Senate’s patient protection measure does not have a comparable provision. According to Chao, some individuals are breaking the law by offering plans to small employers that amount to insurance scams.

The Labor Department reports it has retrieved more than $115 million for participants from approximately 500 investigations into health insurance scams.

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