Last week the Small Business Health Options Program (SHOP Act) (H.R. 2360) was reintroduced by Rep. Ron Kind (D-WI). This bill has bipartisan support, with 25 co-sponsors. In essence, this legislation would amend the Public Health Service Act to create state or nationwide health insurance purchasing pools for small businesses and the self-employed. A small business for purposes of this bill would be one with fewer than 100 employees who work an average of at least 35 hours per week. Self-employed individuals covered by this act must earn at least $5,000 in net earnings or not less than $15,000 in gross earnings from self-employment in the preceding taxable year.
According to a press release issued by Rep. Kind, the SHOP Act would do the following:
- Permit small businesses and the self employed to band together in a statewide or nationwide pool to obtain lower health insurance prices by spreading their risk over a larger number of participants.
- Offer a range of private health plans that have to compete for business.
- Provide small business owners with an annual tax credit of up to $1,000 per employee ($2,000 for family coverage) if they pay for 60 percent of their employees’ premiums, and a bonus tax credit if they pay for more than 60 percent of the premiums. Self-employed individuals would get a $1,800 annual tax credit ($3,600 for family coverage) to purchase health insurance.
- Reduce administrative costs for small businesses.
- Ban the practice of rating insurance based on health status and claims experience.
- Provide a website with comparative information about a variety of private health plans.
- Establish accountability measures that rely on the oversight of state insurance commissioners to ensure that all health plans meet state requirements for financial solvency, network adequacy, and claims and appeal procedures.
This legislation has been referred to the House Committees on Energy and Commerce, Education and Labor, Ways and Means, and Rules.