New state law expands health insurance access

~ The law lowers the mandatory number of members needed for association health plans.

Gov. Matt Blunt signed legislation Friday aimed at increasing access to affordable health insurance for employees of small businesses.

The bill, sponsored by Rep. Jay Wasson, R-Nixa, expands eligibility for association health plans by decreasing the mandatory number of members from 100 to 50. The Department of Insurance also would be allowed to exempt insurers that cover both small and large businesses from certain rate restrictions.

Blunt said giving small businesses access to affordable health coverage is one way to keep more people out of emergency rooms.

"I believe this will be among the most important legislation we pass this year," he said during a visit to Kansas City, one of several stops around the state to promote the new law.

The Cape Girardeau Chamber of Commerce will begin forming a committee of business leaders next week to study "the pros and cons" of new legislation.

"We want to establish a local group to hear any concerns that people may have," said chamber executive director and CEO John Mehner.

He declined to elaborate on what those concerns might be, except to say that's what the committee would determine.

At least one area small-business owner said he was interested in participating. Glenn Reeves, who owns Horizon Screen Printing in Cape Girardeau, said he would participate if it saved his company money.

"Even a small company can save money under this law," said Reeves, who was familiar with the legislation. "And if I can save money, absolutely I would do it."

Association or consortium health plans were already available for small businesses under existing law, but this bill allows the establishment of "protective covenants," according to Rep. Doug Ervin, R-Kearney. Instead of bidding for health insurance as 50 individual businesses, the covenants allow a particular association to submit one bid for the whole group, which is then treated as one large company.

Ervin believes the covenants also will help to drive down the cost of health coverage by allowing consortiums to pressure individual members to keep employees healthy. For example, if one company has too many smokers whose health claims are driving up premiums for the entire association, other companies in the consortium can nag the bothersome one to make changes. However, consortiums are not allowed to oust the offending company.

"Peer pressure is a good thing in this case," Ervin said.

Businesses cannot form a new organization strictly to get lower-cost health coverage, said Brent Butler, the Missouri Insurance Coalition's government affairs director. Most already belong to industry associations, such as a chamber of commerce.

Friday also marked the last day for the governor to sign bills, and the health insurance measure was his final act on legislation passed this spring.

Business editor Scott Moyers contributed to this report.