Business Groups Hoping Health Bills Make It To Youngkin's Desk

Grottoes machine shop Valley Tool and Design has seen costs go up from supply chain issues and the COVID-19 virus, but its fastest growing expense had been on the rise since before the pandemic, according to Ben Carr, vice president.

Providing health insurance for the company's seven employees has outpaced every other cost increase, he said.

This General Assembly session, legislators have introduced a variety of bills that would allow businesses or groups like Valley Tool and Design to join together to form a larger group and bargain more effectively with insurance providers for plans at a better price.

Carr said the concept seemed "excellent" but still emphasized the importance of the details.

"I would say anything that improves the bargaining position for any employer, large or small, is always going to be welcome," he said. "If something like this is feasible [and] as long as it doesn't mean any lessening of what's available to be covered for employees and there are no other hooks or obligations."

In his first speech to the General Assembly on Monday, Gov. Glenn Youngkin said he would sign a bill allowing association health plans if it made it to his desk.

There are several such bills in the General Assembly this session, while similar efforts have failed in recent years even with bipartisan support, according to groups trying to get the bills passed into law.

One is being carried by Del. Tony Wilt, R-Broadway, in the House of Delegates.

House Bill 245 would allow businesses of 50 employers or less to form consortiums together, according to the bill accessed through the Virginia Legislative Information System.

"It leverages the advantages of pooling small businesses together to lower the cost for the employees and their families," said Barry DuVal, president and CEO of the Virginia Chamber of Commerce, which supports the bill.

States such as Ohio, Missouri, Indiana and Georgia have allowed such health consortium plans in recent years, according to DuVal.

He said businesses there have seen 15% to 20% in cost savings on insurance since such health consortiums were allowed.

Additionally, small businesses could obtain better insurance packages and thus the ability to compete more effectively with large companies for available workers — a big boost in the workers' market where small businesses have difficulty competing to attract workers when massive companies can offer better health benefits, according to DuVal.

Another association health bill in the General Assembly was drafted with help from the Virginia Association of Realtors.

The Realtors have been working to get such association health plans enacted for four years, according to Martin Johnson, senior vice president of government relations for the Virginia Association of Realtors.

He said roughly 20% of the association's 38,000 members reported not having health insurance in the most recent survey of members last year.

This is because they make too much money to be able to access affordable care through the state markets, but buying health care as an individual or for their family takes a large share of their income, Realtors said in the survey, according to Johnson.

"For a lot of our members, [getting health insurance] is either too expensive for them to afford or it's certainly putting a real strain on the household income," he said.

The plans would allow another option for people, Johnson said.

"The stumbling block for us the last several years has been getting the governor to support these types of plans," he said.

Concerns about creating association health plans runs a gamut from ensuring quality of care for Virginians, higher premiums for those on Virginia Medicaid and financial footing of the associations so they do not fall into bankruptcy and suddenly leave large numbers of people without insurance coverage, according to Johnson and DuVal.

Johnson and DuVal said there are consumer protections in the bills they respectively discussed, such as requiring insurance offerings regardless of preexisting conditions.

Consortiums would have to submit to regulatory review to ensure stable financial footing in the bill backed by the chamber, according to DuVal. He said this is in response to cases in the past in other states where consortiums had gone belly up.

Additionally, they argued the bills would not reduce the number of people on state Medicaid rolls. If the number of people on state Medicare rolls decreases by large amounts, it could cause premiums to rise for those who remain.

DuVal and Johnson said the people who would be able to join association plans under their respective bills are already not relying on Medicaid — Realtors because they make too much to access the public market and small-business employees because they are already covered by their companies.

Back in Grottoes, Carr said his own employees aren't able to go on the public markets anyway because their wages are above the threshold.

"If you want everybody on the state plan, let everyone on it," he said.

Otherwise, association plans could bring down costs for his business and allow him to offer better options to potential workers.

Government officials "have to make their mind up one way or another," he said.