LABI Logo Get Involved

Letters: Courts should support insurance options for small businesses

July 4, 2019
Originally posted on The Advocate

Small business owners struggle to provide their employees with health insurance. About 8 in 10 are concerned about health care prices.

Last year, President Donald Trump took steps to change that. His administration finalized a rule that would let small businesses band together and buy less expensive health plans.

I own a small business here in Louisiana — DonahueFavret Contractors in Mandeville — and I know how beneficial such cost-saving measures can be. Unfortunately, the rule is tied up in court. That's disheartening.

When it comes to accessing affordable insurance, large employers have several advantages. They have more bargaining power when negotiating with insurers and providers because they represent so many policyholders. A larger pool of people also makes it easier for big employers to disseminate risk and absorb high-cost claims.

The recent Trump administration rule aims to level the playing field between small employers and large ones. It allows businesses in the same industry or geographic area to enroll in an Association Health Plan — or AHP — that is regulated like the plans available to larger businesses. The rule even allows self-employed workers to join an AHP.

These plans can yield huge savings. AHPs are likely to have about 30 percent lower premiums than those associated with traditional small-group coverage.

Unsurprisingly, when the rule was finalized, many Americans joined AHPs. That is expected to continue — but only if the rule makes it out of court.

Last year, a group of Democratic attorneys general filed a lawsuit claiming the AHP rule violated laws that govern the health insurance markets. A district court judge ruled in their favor this March — a decision the Department of Justice has appealed.

The district court's ruling hits Louisiana particularly hard. Our state is home to more than 430,000 small businesses. For small businesses nationwide, the average family's health insurance premium increased 20 percent from 2013 to 2018.

Louisiana's self-employed workers struggle to afford care, too. From 2014 to 2019, average individual premiums surged nearly 50%.

As board chairman of the U.S. Chamber of Commerce, I am fighting to make sure workers can benefit from AHPs. Recently, the Chamber filed an amicus brief defending the AHP rule in court. We were joined by the National Federation for Independent Business and 65 state and local groups, including the Louisiana Association of Business and Industry.

We need more choices for affordable health insurance. AHPs are a great option for small businesses and self-employed workers. Let's hope our courts realize this.

Maura Donahue

Board chair, U.S. Chamber of Commerce