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House Committee Approves Health Care Reform Bill

Location: Washington, DC

House Committee Approves Health Care Reform Bill

The House Education and Labor Committee today passed the America's Affordable Health Choices Act which included Congressman Phil Hare's amendment to create Small Employer Benefit Arrangements (SEBA) to facilitate the participation of small businesses and the self-employed in the Health Insurance Exchange (HIE).

Hare's initiative would allow SEBAs to contract with the HIE to provide operational expertise, consumer information, capacity for benefits integration, ongoing management, outreach and enrollment to small employers and their employees. SEBAs would benefit small businesses and rural residents by reducing administrative costs on employee benefits and providing small businesses the opportunity to effectively and efficiently navigate the new health care system. Hare's amendment is expected to save small business owners approximately 7.5 hours per week that would normally be spent on managing employee benefits.

A SEBA is a structure that allows small businesses to join with other businesses or self-employed individuals (such as farmers) in the same industry to pool resources, spread risk, elect joint management, and provide the collective power to more strongly advocate for the specialized services they all want through the Health Insurance Exchange (HIE). The HIE—newly created by the reform legislation—is a marketplace for individuals and small employers to comparison shop among private and public insurers to find the best, most affordable health plan.

SEBAs will maximize the benefits provided by the HIE and ensure the broadest possible small business coverage in a cost-effective manner. SEBAs are owned and funded by their members and no member may have more than a 5% ownership or voting interest.

"Small Employer Benefit Arrangements will empower small businesses and the self-employed to find the best possible and most affordable health care for their employees," said Hare. "This amendment will ensure they have the assistance necessary to navigate the complexities surrounding employee benefits in order to choose and manage the best health plan at a reduced cost."

The amendment would have far-reaching effects, especially in rural areas where small businesses account for 90 percent of all establishments and nearly two-thirds of all jobs. Nationwide, there are over 1 million eligible small businesses, employing over 8.5 million workers, who would likely join a SEBA. In Illinois alone, small businesses represented over 98 percent of the state's employers in 2006 and employed almost 50% of the private-sector workforce. SEBA's will give these employers the power to more strongly advocate for the health care interests of their employees within the HIE.

Hare's amendment was unanimously approved by the Committee and will be part of the final health care reform bill that goes to the House floor.

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