Legislature(1995 - 1996)

02/28/1996 03:20 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 SB 178 - SMALL EMPLOYER HEALTH INSURANCE                                    
 CHAIRMAN PETE KOTT announced the first issue the committee would              
 address would be SB 178(title am), "An Act increasing the number of           
 eligible employees that constitute an employer group for purposes             
 of providing small employer health insurance; amending the                    
 definition of `small employer'; and requiring an annual report from           
 the Small Employer Health Reinsurance Association until 1999,"                
 sponsored by Senator Rieger.  He informed the committee SB 178                
 addresses some minor changes to legislation which was passed a                
 couple of years ago.                                                          
 Number 145                                                                    
 SENATOR STEVE RIEGER, sponsor of SB 178, said a couple of years ago           
 a small group health insurance bill was passed which established              
 some of the mechanisms of a pool for the insurance of the small               
 employer groups.  He noted "small employer groups" were defined as            
 "employee groups from 2 to 25 employees."  After two years of                 
 experience, it has been proven to be working.  The intent of SB 178           
 is to broaden the statute so the definition of "small employer"               
 would be changed to 2 to 50 employees instead of 2 to 25.  He                 
 explained it increases the ability for a number of additional                 
 employers to get into the small group health insurance market that            
 was served by the original bill.                                              
 Number 243                                                                    
 REPRESENTATIVE NORMAN ROKEBERG asked the number of groups, if any,            
 have availed themselves in the previous legislation.                          
 SENATOR RIEGER indicated there are several ways to answer the                 
 question.  In a way, every group that is a 2 to 25 employer group             
 that is applying for insurance has been subject to this bill                  
 because if you are an insurer doing business in Alaska, you are by            
 definition, part of this pooling mechanism.  Senator Rieger                   
 explained the measure has sort of a automatic pooling and then it             
 has an optional second pool - a reinsurance pool, which is a buffer           
 to accommodate high risk cases where an underwriter couldn't                  
 justify underwriting the group within the band of premiums that are           
 prescribed in the bill.  There is only a couple of cases where the            
 reinsurance pooling mechanism has been necessary.  He referred to             
 testimony given in the Senate from people who said it has made it             
 easier to underwrite groups, but that is not as quantifiable                  
 because unless you go into the reinsurance pool, there is not a               
 true statistic you can point to.                                              
 Number 377                                                                    
 GORDON EVANS, Lobbyist, Health Insurance Association of America,              
 said during the three years that legislation has been in effect, it           
 seems to be working.  When the measure was originally enacted, it             
 was thought that the coverage of the bill would affect about 85               
 percent of the small businesses.  He referred to the increase from            
 25 to 50 employees and said it would probably up the figure to                
 about 92 percent of Alaska employers.  Mr. Evans noted the figures            
 came from the Health Resources Access Task Force Study which was              
 done in the late 1980s and early 1990s.  He said his organization             
 supports the bill.  Alaska would be the eighteenth state to change            
 their coverage up to 50 employees.                                            
 Number 489                                                                    
 There being no further testimony, REPRESENTATIVE ROKEBERG made a              
 motion to move SB 178(title am), out of committee with attached               
 fiscal notes and individual recommendations.                                  
 CHAIRMAN KOTT asked if there was an objection.  Hearing none, SB
 178(title am), was moved out of the House Labor and Commerce                  
 Number 500                                                                    
 CHAIRMAN KOTT said the committee would take a brief at ease at 3:26           
 p.m.  The meeting was called back to order at 3:30 p.m.                       

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