Final
BILL SUMMARY for SB05-103

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Votes:
Action Taken:
<none><none>





01:37 PM -- Senate Bill 05-103

Representative Jahn presented SB05-103 which exempts employers participating in a Multiple Employer Welfare Arrangement (MEWA) from being subject to premium adjustments up to 35 percent above the regular rate of small group insurance plans if the employer has been either self-funded or not insured through a small group plan. Representative Jahn testified that it is important for small employers to have as many options as possible for health care coverage for their employees. The original intent of the 35 percent adjustment was to provide a disincentive for employers to leave the MEWA market for the small group market and then return. Such a move is also called "gaming" the system. Healthy individuals leaving the small group market for the MEWA could theoretically make the small group's premiums increase, due to the relative poor health of its remaining members. Representative Jahn responded to questions from the committee.

01:45 PM -- Patrick Boyle, representing Colorado Group Insurance Association, testified in opposition to the bill. Mr. Boyle testified regarding the rationale of the 35 percent penalty provision. By eliminating the penalty, Mr. Boyle testified that the bill gives MEWAs special treatment that is unjustified and will put pressure on the legislature to eliminate the penalty for all types of insured groups. Mr. Boyle responded to questions from the committee.

02:01 PM -- Peg Brown, representing the Colorado Association of Health Plans, testified in opposition to the bill. Ms Brown testified that her organization supported the 35 percent penalty in current law in order to prevent gaming of the system. Ms. Brown responded to questions from the committee.

02:15 PM -- David Thomas and Greg Fulton, representing the Colorado Motor Carriers Association, testified in support of the bill. Their members have seen a 10 to 30 percent health insurance premium rate increase. According to Mr. Fulton, the trucking industry currently has a profit margin of about 3 percent and cannot afford such increases in health premiums. Mr. Fulton testified that the MEWA provision is a pilot program, and thus, if it does not work, it will sunset. Mr. Thomas testified that MEWAs should be exempt from the 35 percent provision because the member organization cannot show a preference for members that might represent a good risk versus a bad risk, but rather, they must insure all members. This eliminates the incentive for gaming. Mr. Thomas responded to questions from the committee.

02:26 PM -- Vickie Agler, representing the National Federation of Independent Business, testified in support of the bill. Ms. Agler testified that the number one concern of small business in Colorado is health care costs. Ms. Agler responded to questions from the committee.

02:36 PM

Representative Marshall took the bill off the table so that the sponsor could pursue further work on amendments.