A state Senate bill promoting association health plans for small business employers is heading to the House floor.

Senate Bill 86 cleared the House Rules and Operations committee Tuesday.

The bill would loosen the requirements for AHPs in North Carolina in response to federal Labor Department changes made in June 2018 by the Trump administration.

After clearing the Senate by a 40-8 vote March 14, SB86 was placed on a slow path in the House.

It took until June 27 before it was acted upon by the House Finance committee. It went another five weeks before Tuesday’s meeting.

SB86 piggybacks on previous association health plans 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.

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, bill co-sponsor Sen. Joyce Krawiec, R-Forsyth, 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.

Companion House Bill 464 has not been addressed since being recommended April 11 by the House Insurance committee.

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.

Rep. Dan Bishop, R-Mecklenburg, and who is running for N.C.’s open Ninth Congressional District seat, has said that adding the essential benefits to the bill could derail the entire AHP platform in the state.

There are two 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.

The N.C. Chamber has made the bill one of its top legislative priorities for the current session.

Mitch Kokai, policy analyst with Libertarian think tank John Locke Foundation, said the final version of the legislation is likely to incorporate ideas from both (legislative) chambers.

“What remains to be seen is whether the AHP idea gets caught up in negotiations over other health care issues, including Medicaid expansion,” Kokai said.

Kokai said it is possible Democratic Gov. Roy Cooper could “reject a standalone AHP bill if lawmakers do nothing to address his Medicaid proposal.”

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rcraver@wsjournal.com 336-727-7376 @rcraverWSJ

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