SENATE COMMITTEE SUPPORTS SMALL BUSINESS HEALTH INSURANCE PLAN

FOR IMMEDIATE RELEASE                                                                   Tuesday, March 18, 2008

Contact: Senator Kathleen Sgambati

(603) 271-3074

SENATE COMMITTEE SUPPORTS SMALL BUSINESS HEALTH INSURANCE PLAN

CONCORD – The Senate Commerce, Labor and Consumer Protection Committee voted 5-0 today in support of a new health insurance program for small businesses, called New Hampshire Health First. The legislation now heads to the full Senate with a recommendation of “ought to pass.”

The goal of Senate Bill 540, sponsored by Senator Kathleen Sgambati (D-Tilton) and supported by Governor John Lynch, is to provide a more affordable health insurance product for small businesses by requiring major insurance carriers in the state to offer a standard wellness plan for small businesses with up to 50 employees.

“Large employers, with their greater bargaining power, have already created incentives for better care management and for employees to protect their own health. New Hampshire Health First would make these cost-saving benefits available to the small employer,” Sgambati said.

The plan would control premium costs by focusing on prevention, managing chronic conditions and promoting best practices. Similar legislation in Rhode Island produced a savings of more than 15 percent for small businesses compared to other forms of coverage available in the market.

At a public hearing, several small business owners spoke in support of the plan.

Senate Bill 540 calls for the state Department of Insurance to set up an advisory committee to develop the specifics of the plan to provide essential insurance coverage while promoting employee health. The target premium price would be 10 percent of the prior year’s median wage, currently about $262 per month.

Safeguards protect insurance companies from having to absorb a loss if the premium price is not adequate to cover their costs. The advisory committee would rework the plan if no insurance carriers can meet the target price. In addition, the legislation calls for plan requirements to be reviewed and revised every three years.

“There is an opportunity here. We can develop a product that helps our small business owners who’ve been struggling with sharply rising insurance costs for years now. If this allows more of them to keep their employees covered, we all benefit,” said Senator David Gottesman, (D-Nashua) chairman of the Commerce Committee.