Small Business Health Care Act Gets Bipartisan Approval in N.C. House

Raleigh, N.C. – Legislation to help small businesses in North Carolina offer health insurance to their employees received broad bipartisan approval from the state House of Representatives on Wednesday.

Senate Bill 86 Small Business Health Care Act passed the state House 82-32 and is expected to also be approved by the state Senate.  Lawmakers from both chambers announced agreement on its provisions at a press conference on Wednesday.

The legislation allows small businesses, sole proprietors, and independent contractors to form large group health plans that offer affordable insurance for association members. 

The plans would be subject to state and federal consumer protections, including covering those with preexisting conditions, and the bill ensures any insurance product offered under its guidelines meets certain solvency standards.

The “Association Health Plans” (AHPs) would expand access to coverage for working North Carolinians.  It aims to expand the healthcare market for businesses to offer quality, affordable coverage to their employees. 

The plans are expected to reduce the cost of healthcare coverage for hundreds of thousands of North Carolinians by treating small businesses the same as large corporations, through new insurance products regulated by the state Department of Insurance (DOI).

The bill addresses a long-time priority of business coalitions in the state and is supported by the North Carolina Retail Merchants Association, the North Carolina Farm Bureau, the North Carolina Chamber of Commerce, the North Carolina REALTORS, the North Carolina Restaurant and Lodging Association, and a number of other stakeholder groups.

AHPs would be subject to state and federal regulations and could only be sponsored by associations that have been established for at least three years, are statewide in nature, and can demonstrate solvency by maintaining a minimum net worth equal to at least one month’s premiums.

Greg Adams, a business owner who operates grocery stores in Lee County and is chairman of the board of directors for the North Carolina Retail Merchants Association, said the state’s tight job market makes recruiting and retaining employees difficult without adequate health care coverage options.

“Our companies health insurance costs have gone up tremendously over the last few years,” Adams said. “When our association’s board of directors meet, the cost of health insurance and a plea for legislative relief is the number one issue we discuss.  We urge the North Carolina General Assembly to enact Senate Bill 86 to help level the playing field for businesses like mine.”

The Executive Director of the North Carolina Craft Brewers Guild Richard Greene also spoke in favor of the legislation on Wednesday.

“We have a lot of small business people who employ between five and twenty-five people,” Greene said.  “Their biggest issue is to be able to attract employees, retain them, and provide a decent living that includes health care.  I want to thank the legislators for their hard work on this bill.  This is a very critical piece to our businesses.”

Wendy Harris, owner of Team Harris Real Estate in Fayetteville, N.C., said that some real estate agents are being forced to choose between paying for their health insurance and paying for their mortgage.

“On behalf of more than 45,000 members across all 100 counties in our state, it is my pleasure to stand here today and support Senate Bill 86 and all the work to bring life-saving options provided by Association Health Plans to North Carolinians,” Harris said.  “We’re involved in this effort because our members need an option for affordable, quality, and acceptable health care coverage.”

“Our future health and well-being depends on the success of this bill.”

A bipartisan group of lawmakers stood with North Carolina citizens on Wednesday to urge passage of Senate Bill 86 in the state General Assembly.

“This is an exciting day for small businesses across North Carolina,” said Rep. Kyle Hall (R-Stokes).  “As a realtor, I see in our small real estate firm that some of our agents are not able to go out on their own and purchase health insurance.   I’ve heard it from plumbers, coffee shop owners, farmers, and so many others in our state that they need this bill to help insure working North Carolinians.”

Any person who is a working owner, or gets paid through a Form 1099, would be able to participate in the plans, Rep. Hall said, and the plans would cover preexisting conditions and be subject to state regulation through DOI.

Rep. Brian Turner (D-Buncombe) said AHPs would have to cover preexisting conditions and operate essentially as large employers under North Carolina law. 

“I’m really excited about this bill,” said Rep. Turner.  “I’m glad to work in this bipartisan effort to bring this bill to the floor today.  This bill really addresses a number of the concerns people have had with these types of plans in the past.”

“These plans will have to abide by strong solvency standards, cover preexisting conditions, they’re going to be regulated by DOI, and essentially they will operate as large employers under North Carolina law and still have coverage requirements, rules, and regulations to abide by.”

Rep. Josh Dobson (R-McDowell), a leader on health care issues in the state General Assembly, also spoke in favor of the bill on Wednesday:

“The small business health care act provides a tool for our small businesses to combat rising cost of healthcare under the Affordable Care Act and to seek lower cost options for their employees,” said Rep. Dobson.  “These organizations represent hundreds of thousands of small businesses, independent contractors, and employers who reside in in all 100 counties across this state.”  

The state Senate is expected to agree to the current version of Senate Bill 86 after passage in the North Carolina House of Representatives.

“As we travel around as legislators and talk with our constituents, small business owners tell us every day the difficulties of offering health care coverage to their employees,” said Sen. Joyce Krawiec (R-Forsyth), a lead sponsor of the legislation. “This bill is a step in the right direction.”

Sen. Jim Burgin (R-Harnett) said AHPs open an important pathway for businesses and employees to access healthcare coverage.

“It is an important bill that increases access to health care for hardworking small business employees and sole proprietors,” Sen. Burgin said.  “It puts small businesses on a level playing field with large companies, allowing them to offer more attractive benefit packages and to recruit the best and brightest talent.”