A bill that would let more Kansas trade associations develop their own self-funded health plans was endorsed today by a Senate Committee.
Senate Bill 309 got unanimous approval from members of the Senate Financial Institutions and Insurance Committee.
Supporters of the measure, which had no apparent opposition, said it was based on models already successfully operating in 20 other states. Current Kansas law bars association health plans, though exemptions exist for six trade groups: American Institute of Architects-Kansas, the Kansas Dental Association, the Community Bankers Association of Kansas, the National Association of Independent Truckers-Kansas, the Kansas Bankers Association, and a trade group that covers doctors in the Kansas City metro area.
The bill, as amended by the committee, would allow virtually any Kansas association that has been in existence at least five years and has at least five members to have its own health plan.
Supporters said the new law could “soften” some of the effects of the Affordable Care Act on small businesses by exempting them from some of the federal health reform’s requirements.
For example, self-funded association plans are not required to meet the “essential” benefits standards of plans offered through the federal health insurance marketplace and also are exempt from the ACA’s limits on beneficiary cost sharing.
Some health policy analysts predicted when the health reform law was passed that it might spark the movement of small businesses into association plans to avoid ACA requirements. One possible check on that, according to a report by the Urban Institute and the Robert Wood Johnson Foundation, is that self-funded association plans might have trouble getting the stop-loss or reinsurance coverage they would need to backstop their plans.
Thomas Bryon, president of SS&G and Associates, a Johnson County insurance agency, told committee members last week that as many as 350,000 Kansans might be eligible for coverage under a self-funded association plan, if SB 309 becomes law.
Supporters of SB 309 also said it would allow workers in the plans to keep their coverage after changing jobs so long as they remained within a particular industry or trade association plan.
Sen. Jeff Longbine, an Emporia Republican, was chosen to carry the bill when it is debated by the full Senate on a date yet to be determined.
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