A state Senate bill that would allow small businesses to use associations to get health care plans cleared the House by an 82-32 vote Wednesday.
Senate Bill 86 would loosen the requirements for 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.
Mitch Kokai, senior policy analyst with Libertarian think tank John Locke Foundation, said it is possible Democratic Gov. Roy Cooper could “reject a standalone AHP bill if lawmakers do nothing to address his Medicaid proposal.”
The state Senate may choose not to agree on the latest version of SB86 since the House inserted several elements of its version of AHP legislation. If that happens, the two chambers could create a concurrence committee or the Senate could shelve the latest version.
House Bill 464 has not been addressed since being sent April 11 by the House Rules and Operations committee.
For example, the House added language from HB484 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,” said Sen. Joyce Krawiec, R-Forsyth, and co-sponsor of SB86.
“No significant changes were made. It’s basically the same bill originally sent from the Senate. Pre-existing conditions is already a mandate with AHPs, so this language isn’t necessary, but it does provide clarity.
“This bill will do more to help small business offer health insurance to their employees than any action taken in some time,” Krawiec said.
Rep. Donny Lambeth, R-Forsyth, and a leading House health care expert, said that “while there are still some in the insurance market who may not like certain aspects of the bill, I believe the heath chairs are in agreement to move the bill forward.”
“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.
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.
After SB86 cleared the Senate by a 40-8 vote March 14, it 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 clearing House Rules and Operations committee.
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.
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.