A state Senate bill that would allow small businesses to use associations to obtain health-care plans received final clearance in the Senate by a 31-9 vote Tuesday.
Senate Bill 86 now goes to Gov. Roy Cooper for his signature. The House passed the bill by an 82-32 vote Aug. 7.
Bill supporters estimate that about 110,000 North Carolinians, or about 1% of the population, could benefit from signing up for an AHP plan.
SB86 piggybacks on previous AHP legislation, such as permitting a grouping of employers in the same trade, industry or line of business in an AHP. Employers with up to 50 workers could qualify and there must be at least 500 employees combined to qualify for a AHP.
Mitch Kokai, senior policy analyst with Libertarian think tank John Locke Foundation, said it is possible Cooper could “reject a standalone AHP bill if lawmakers do nothing to address his Medicaid proposal.”
Senate leader Phil Berger, R-Rockingham, addressed that possibility in a statement Tuesday in which he said Cooper "can choose to either sign the bill or veto it, blocking a way for thousands of small business owners and their employees throughout the state to access affordable health insurance."
Cooper's office said he is reviewing the bill.
The N.C. Association of Health Underwriters, representing more than 3,000 insurance agents, brokers and consultants. released a statement Wednesday in which it encouraged Cooper to sign the bill.
"The adoption of enabling legislation for Association Health Plans will provide self-employed individuals, small business owners, and gig-economy workers and their families an affordable health insurance option," the association said.
"Please know that SB86 is an appropriate, beneficial expansion of health insurance options for North Carolinians, as you have stated is an important goal of your administration."
The bill would loosen the requirements for Association Health Plans (AHPs) in North Carolina in response to federal Labor Department changes made in June 2018 by the Trump administration.
However, on March 28, a federal District Court judge struck down the final U.S. Labor ruling. U.S. Labor officials filed an appeal April 26.
On April 29, U.S. Labor said it would not enforce violations stemming from good faith reliance on the AHP rule’s validity, as long as businesses in an AHP meet their responsibilities to pay health benefit claims as promised.
“Far too often when speaking with our constituents, we hear from small business owners who tell us how difficult it is to offer health care coverage to their employees,” bill sponsors Sen. Joyce Krawiec, R-Forsyth, and Sen. Dan Bishop, R-Mecklenburg, said in a joint statement.
“This is an important bill that makes high-quality health coverage a more affordable option for small business owners and sole proprietors.
"It will allow small employers to offer more attractive benefits packages and put them on a more level playing field with large companies to recruit the best and brightest talent.”
The Senate opted to accept the House inserting several elements of its version of AHP legislation from House Bill 464. That bill has not been addressed since being sent April 11 by the House Rules and Operations committee.
The House added language that emphasizes AHPs “cannot deny individuals coverage if they have pre-existing conditions, as well as can’t impose annual and lifetime limits of certain benefits, and must provide free access to certain preventive services.”
The Senate’s version of SB86 did not cite that language. It was focused more on establishing membership requirements and allowing more small employers to offer stop-loss, catastrophic and reinsurance coverage.
“The House sponsors have worked closely with Senate sponsors to produce the best bill possible,” Krawiec said. "This bill will do more to help small business offer health insurance to their employees than any action taken in some time.”
Rep. Donny Lambeth, R-Forsyth, and a leading House health care expert, said "there is good support within the various associations, such as Realtors and N.C. Farm Bureau, who continue to ask for an option for their membership.”
Critics of AHPs say giving small employers access to the flexibility of larger employers could lead to those plans opting out of providing 10 essential health-care benefits required in the federal marketplace under the Affordable Care Act.
Those benefits are: ambulatory or outpatient services; emergency services; hospitalization; maternity and newborn care; behavioral health services; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services, and chronic disease management; and pediatric services, including oral and vision care.
SB86 does not include guarantees of the essential benefits. An amendment to add the essential benefits to SB86 was tabled by a 28-20 vote in the Senate.
What’s new in SB86 is that an AHP could be accessed by non-affiliated employers within the same region or metropolitan area, allowing for the crossing of state lines in some instances.
The AHP has to be offered by a nonprofit with at least 500 members. The nonprofit has to have been in business for at least two years for reasons beyond providing insurance, such as a chamber of commerce or a trade group.
As an example, Krawiec cited the possibility of the Winston-Salem, Greensboro and High Point chambers of commerce joining forces to form an AHP. Krawiec has said up to 110,000 North Carolina small-business employees could benefit from the legislative change.
There are two other primary differences in the AHP bills.
The Senate version would require fewer years — two compared with five — for the sponsoring organization to be in existence. The House version would require employers to make at least a two-year commitment to the AHP.