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 Committee. 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.