Insurance problems have hurt businesses

Insurance problems have hurt businesses

By STATE SEN. STEVE SOUTHERLAND

Ensuring access to affordable health coverage is very important to every Tennessean! It is vital to promote the purchase of health insurance by small businesses in the state.

A new law passed by our General Assembly this year does just that by providing more flexibility for small business owners who may choose to form insurance pools. As sponsor of this legislation, I was proud to be a part of this effort.

According to the U.S. Small Business Administration, 97.2 percent of businesses in Tennessee are defined as small. Although Tennessee has made strides in trying to provide insurance through CoverTN, most of the approximately 13,000 small businesses that participate in that program are sole proprietors. Therefore, we must continue to find ways to expand affordable coverage to small businesses.

Health insurance premiums have skyrocketed over the past two decades, making affordability a huge barrier to coverage. As a small-business owner, I understand the impact of this kind of increase in operation expenses.

Everyone ends up paying

The lack of affordable health insurance has hurt small-business owners, their families and their employees. This, in turn, also raises the cost to taxpayers, because many individuals who lack health insurance visit an emergency room for treatment. Emergency room care is more expensive than a physician visit, which raises health-care costs for everyone.

Over the last decade, health-care- related cooperatives have emerged as a key strategy for keeping health-care costs and insurance premiums affordable for consumers and small businesses. That’s why many states have passed similar laws to encourage them.

In crafting this new law, I worked in collaboration with representatives of the National Federation of Independent Business to provide legislation that gives small businesses predictability and stability in health-insurance rates. This has been one of the hurdles for health-care cooperatives in the past.

Several other key provisions in the new law help to promote the growth of these cooperatives. The new law raises the eligibility to participate threshold from 25 to 50 eligible employees, with a two-employee minimum.

It goes on to define a health group cooperative as a private purchasing cooperative that contains at least 1,000 employees or that has a minimum of 10 participating employers.

Membership would be voluntary, but participants must commit to purchasing coverage of fully funded plans through the cooperative for five years to ensure pool stability.

Finally, a cooperative must operate as a nonprofit organization and must register and demonstrate compliance with the Department of Commerce and Insurance.

All of these factors provide a sound program, which I believe will help many small-business owners provide health-care insurance coverage to many more of our citizens. And that is good medicine for Tennessee!

State Sen. Steve Southerland is a Republican from Morristown.

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