Businesses would be able to join together through associations to offer employee health insurance under a bill passed by the U.S. House of Representatives Wednesday.

The Small Business Health Fairness Act passed by 236-175 vote, with most Republicans voting for the bill and all but a few Democrats voting against it. The legislation now heads to the Senate, where prospects are uncertain.

The bill would allow small employers to band together through trade or professional organizations locally or across state lines in order to purchase coverage at rates normally available only to large companies, according to the National Retail Federation, which is advocating for passage of the bill.

Some states already allow state-level association health plans, but the proposed law would expand the concept to a national level by shifting regulation of such plans from states to the federal government.

"Smaller employers have fewer employees with which to balance their employees' risk profiles," NRF Senior Vice President for Government Relations David French said. "We believe that AHPs are an important building block toward improving access to affordable health coverage for our nation's small businesses." http://bit.ly/2mwAarL

AHPs are not new. The House passed a similar bill in 2003 but the legislation died in the Senate. Republicans resurrected the proposal as part of a package of health care policies seeking to replace the Affordable Care Act.

The most recent bill received a critical endorsement the day before the vote when the White House issued a statement urging lawmakers to adopt it.

"The bill would strengthen access to health coverage for workers in the nation's small businesses, many of which struggle to provide their employees with healthcare benefits due to dramatic increases in premiums and healthcare costs under the Affordable Care Act," the White House said.

Other supporters include the National Federation of Independent Business and National Restaurant Association.

"This important next step in health care reform allows small, independent restaurants to pool together across state lines through their membership in a trade or professional association like the National Restaurant Association, to purchase health coverage for their employees and their families," said Cicely Simpson, NRA's executive vice president of policy and government.

AHPs also have plenty of critics. In a recent paper for the health policy foundation The Commonwealth Fund, two Georgetown University professors—Kevin Lucia and Sabrina Corlette—said the Small Business Health Fairness Act would put both consumers and businesses at risk by undermining state regulation.

"For an insurance market to work effectively, insurance companies need to operate by the same set of rules," the researchers said. "If a policy allows some insurers to bypass state rules but not others, it sets up an uneven playing field, destabilizes the market and puts consumers at risk." http://bit.ly/2nHBdVp

The National Association of State Insurance Commissioners raised similar concerns in a Jan. 24 letter to members of Congress.

"Such federal actions would strip states of the ability to protect consumers and create competitive markets and should be rejected," the group said. http://bit.ly/2ns1QNn

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