ACHRNEWS

Speaking Out On Association Health Plans

September 15, 2004
Association Health Plan (AHP) legislation, written to allow national trade associations to offer health insurance to members, passed the U.S. House of Representatives on June 19, 2003, but has been stalled in the U.S. Senate as senators consider the legislation.

The delay has disappointed at least two of the leading contractor groups, the Air Conditioning Contractors of America (ACCA) and the Associated Builders and Contractors (ABC).

According to the recent U.S. Census Bureau, there has been a rise from 43.6 million uninsured Americans in 2002 to 45 million in 2003. This fact is just one reason why ACCA President and CEO Paul T. Stalknecht is demanding action by the Senate to pass AHP legislation this year. He wants Congress to help address the skyrocketing health care costs that small, community-based contractors have experienced for the last several years.

"ACCA's contractors across the United States are clamoring for AHP legislation that will allow them to both lower their health insurance premiums and continue to provide their employees with access to quality health care," said Stalknecht.

He said health care insurance ranks at the top of HVACR contractors' concerns, along with the qualified labor shortage.

"While there's no doubt that the ongoing labor shortage is the largest issue with which contractors are dealing, our members also told us that health insurance is their No. 1 legislative priority," said Stalknecht.

"Perhaps the ability of contractors to afford attractive health insurance for employees acerbates the labor shortage issue. The two issues seem to go hand-in-hand."

Stalknecht noted that the lack of insurance or limited coverage for employees further adds to the problem of attracting and keeping a workforce in place for many small business owners in the HVACR trade. He cited a recent ACCA member survey which showed that, on an average, small contractors are paying over 60 percent more for health insurance than they were three years ago.

He said that almost all of these contractors, who employ fewer than 25 people, are being forced to either reduce insurance coverage or stop offering it in order to maintain business.

There are overlapping ramifications for companies that offer little or no health insurance, said Stalknecht. For one, it has a detrimental effect on attracting new workers to the trade, said Stalknecht. "Because there is not a level playing field, large corporations and unions can offer comprehensive health insurance packages that attract employees," he said.

"Small businesses are at a disadvantage because they are paying significantly more for health insurance since they do not have the same economies of scale.

"The Senate needs to act now and level the playing field for small business by enacting Association Health Plans. Small businesses need to be able to band together through a trade association to purchase health insurance as a large group, the same way that large corporations and labor unions are allowed to do.

"This industry's ability to attract workers will be severely limited if more and more contractors are forced to reduce health insurance coverage, or drop it entirely. In order to attract workers to the HVACR industry, we need to have a level playing field for our member companies."

ABC Speaks Out, Too

ABC President and CEO Kirk Pickerel was just as vocal as Stalknecht.

"Massive health insurance premium increases are the reality for many small businesses in America today," said Pickerel. "AHPs can reduce health insurance costs by 20 percent or more by allowing small businesses to join together to create economies of scale and bargaining clout. Most importantly, revenues from an AHP go to plan participants through enhanced benefits and lowered costs."

Pickerel noted that large corporations have a decided advantage over small business owners when it comes to providing health care to its employees.

"Large corporations and unions can pool resources to obtain competitive rates for members or employees," he said.

"America's largest employer, the small business community, and its millions of employees deserve that same opportunity. This legislation will give small businesses, their employees, and their families a positive solution to health care coverage and offers a blueprint on how to solve America's health care coverage needs."

AHPs Receive Attention

As part of the 2004 Republican Party platform, introduced at the recent Republican National Convention in New York City, AHPs were given special attention.

The platform section states that the Republican Party supports "legislation to enable small employers to pool together to offer health insurance options to their employees. The legislation, already passed by the [U.S. House of Representatives], gives small businesses the same purchasing power currently enjoyed by large employers and labor unions."

A later section, developed to find ways to bolster American communities, cites "AHPs as a key factor to help increase access to high-quality, affordable health care."

What Contractors Can Do

Stalknecht suggested that contractors take an active role in contacting their senators in order to get the legislation moving. "The No. 1 thing HVACR contractors need to do in order to stop rising insurance costs is to tell their members of the Senate to co-sponsor and vote for AHPs," he said.

"The House has passed this bipartisan legislation twice in 2003 and 2004 and President Bush has repeatedly called for passage of AHPs, but the Senate refuses to address this important issue to the small business community.

"The best thing an HVACR contractor can do is contact their senators today and tell them it is time to act and pass Association Health Plans. HVACR contractors need to tell their company's story about how the rising costs of health insurance is negatively impacting their company and hurting the economy in their senator's state.

"It is time for the HVACR contractor to stand up and demand that the Senate address this vital industry issue."

If business owners want to ensure that their voices are heard in the passage of AHP legislation, titled Senate Bill 545, the Small Business Health Fairness Act, they can contact bill sponsors Sen. Olympia Snowe (R-Maine), Kit Bond (R-Mo.), and Jim Talent (R-Mo.).

Publication date: 09/20/2004