Small Business Commission
September 9, 2008
The Small Business
Commission met in Richmond, Virginia, for a work session. The topic for
the work session was the cost and availability of health insurance for
small businesses. The Commission invited representatives from other Virginia
governmental entities and private organizations interested in this area
to participate in the work session. The invited participants were:
- Robert Nealon,
Chairman, Virginia Small Business Advisory Board.
- Anne Colley,
Bureau of Insurance, Virginia State Corporation Commission, which provides
staff for the Virginia Special Advisory Commission on Mandated Health
- Elizabeth Moran,
Director of Legislative and Community Affairs, Virginia Department of
- Hal Greer, Joint
Legislative Audit and Review Commission.
- Julia Ciarlo
Hammond, State Director, National Federation of Independent Business.
- Tyler Craddock,
Virginia Chamber of Commerce.
- Doug Gray, Executive
Director, Virginia Association of Health Plans.
in the work session were Stephen Bowman from the Virginia Joint Commission
on Health Care and Mark Pratt of Anthem Blue Cross and Blue Shield.
The Commission members
and the participants in the work session discussed numerous issues related
to the cost and availability of health insurance to small businesses and
their employees. It was noted that the number one concern of small businesses
was rising health care costs and that an increasing number of small businesses
are either not offering health insurance to their employees or dropping
the coverage they currently provide. The Commission and the participants
in the work session discussed several specific options to address this
- Allowing small
businesses to participate in the Virginia state employee health plan.
It was noted that no other states have taken this step and that it would
possibly lead to raising the cost of the state insurance as the size
of the risk pool would be increased by the participating small businesses.
- Encouraging the
use of health savings accounts where the employee is able to save money,
tax-free, for current or future health care needs. Health savings accounts
result in the employee being more invested in his health care as his
savings are used to fund it.
- Encouraging the
use of 125 plans, also known as cafeteria plans. These plans, authorized
under the U.S. Internal Revenue Code, allow employees to purchase health
insurance using pre-tax dollars, resulting in savings between 25%-40%
per dollar. These plans may also decrease the tax liability of employers.
- Allowing the
sale of limited benefit health insurance plans that exclude some or
all of the health insurance mandates currently required by the Virginia
- Providing tax
credits or subsidies to small employers as an incentive for them to
offer their employees health insurance.
a program similar to the VirginiaShare Health Insurance Program (HB
593, SB 578) proposed during the 2008 Session of the General Assembly.
This pilot program would have divided the cost of health insurance for
employees of small businesses whose income is at or below 200% of the
federal poverty level between the state, the employer, and the employee.
Although the bills did not pass, the Riverside Health System is attempting
to set up a similar pilot program using private funds.
The Commission concluded
that it should attempt to reach a consensus on some general principles
or guidelines regarding the cost and availability of health insurance
for small businesses that would be circulated to the other members of
the General Assembly for their consideration when drafting legislation
on this topic for the upcoming 2009. The Commission is also planning to
consider whether or not to propose legislation on any of the options discussed
at the work session.
The Commission plans
to hold two more meetings during the interim. The next meeting date will
be posted on the study's website and the General Assembly calendar as
soon as information is available.
The Hon. W. Roscoe
The Hon. Jeffrey M. Frederick
David Cotter, DLS
of Legislative Services > Legislative
Record > 2008
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