Federal officials outline new program, 2nd proposal
 

Release Date: 6/29/2004


Small business owners gathered in Bend, Oregon on Tuesday to discuss the rising cost of health care and explore how Health Savings Accounts and Association Health Plans can reduce the cost of health care insurance for them and their employees.

"The Association Health Plan tool will allow me to purchase affordable health plan packages for my employees," said Gary Ollerenshaw, president of Glolube Inc. in Redmond.

Small business owners frequently list rising health care costs as one of their most pressing concerns. Polls indicate that many small business owners want to provide more and better health insurance to their employees, but are unable to afford it.

Health Savings Accounts (HSAs), signed into law by President Bush as part of last year's Medicare reform bill, offer a new way for small business owners to provide health care.

HSAs are portable, tax-free savings accounts that can be used for routine medical expenses. Anyone can set up an HSA. Contributions, interest, and withdrawals for routine medical expenses are tax free. HSA owners chooses how much to invest and which health care services to purchase with their money.

AHPs, which are not yet law, would allow small businesses to band together across state lines to purchase health coverage. This would give them the same buying and negotiating power that large corporations have.

"Making health care more affordable and available for small business owners and employees is a priority for President Bush and for the SBA," said Norm Proctor, SBA regional administrator (Alaska, Oregon, Idaho & Washington). "Health Savings Accounts are a powerful first step, but there is more we can do. For example, small businesses deserve to be able to band together to purchase health insurance, giving them the same buying power that large companies have."

"Association Health Plans would offer a secure and affordable new health benefit option to millions of working Americans and their families," said Bradford Campbell, deputy assistant secretary of the Employee Benefits Security Administration. "By leveling the playing field for small businesses, AHPs will make high-quality health coverage more affordable."

Roy Ramthun, senior advisor on health care initiatives to Treasury Secretary John Snow, also attended Tuesday's roundtable discussion, and echoed his support for measures to help small businesses afford health care coverage.

"The Health Savings Account is a great new option for small business and the general public to control how their health care dollars are spent and save for the future," Ramthun said.