HB 315-GROUP HEALTH INSURANCE FOR PRIVATE GROUPS CHAIR COGHILL announced that the last order of business would be SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 315, "An Act allowing employers that are small businesses, small nonprofit organizations, or small associations for insurance purposes to join state employee insurance coverage as a group; and providing for an effective date." REPRESENTATIVE NORMAN ROKEBERG, Alaska State Legislature, testified as the sponsor of HB 315. TAPE 02-32, SIDE A Number 0001 REPRESENTATIVE ROKEBERG began by pointing that he has spent the last eight years working on health insurance issues in the legislature. He related his finding that the inability of the private sector market to provide affordable cost effective plans for specific businesses with higher interest rates is pricing them out of the private market. REPRESENTATIVE ROKEBERG noted his sensitivity to the competition with the private sector. He explained his goal of establishing a climate inviting insurance underwriters into the state rather than forcing them out. "On first blush this legislation may appear to be that change in philosophy," he remarked. Representative Rokeberg commented that there's such a problem, especially knowing that Premera Blue Cross of Washington and Alaska holds over 50 percent of the entire covered lives under private health insurance in the State of Alaska. He characterized Alaska's [health insurance market] as a contracting market. Number 0195 REPRESENTATIVE ROKEBERG explained that originally the plan was to open the state plan such that other small businesses would be invited in. A few years ago the administration decided to allow the bargaining units to "step out on their own." He noted that the legislature was never asked about this, and he has always opposed it. He acknowledged the notion that the larger the pool, presumably the lower the rates can be adjusted. Although he recalled the belief that 300-500 people can be an adequate size for a pool, one [critical case] can result in a large annual bill. This original form of the legislation created much protest, which is the reason for the sponsor substitute that doesn't include the bargaining units. The sponsor substitute also raised the number of employees [required to comprise a] small business from 50 to 300. However, Representative Rokeberg noted he is having misgivings about that change and thus he requested that the committee consider lowering that limit back to 50 employees because that's consistent with the state definition of a small business and is less competitive with the private market. REPRESENTATIVE ROKEBERG explained that currently the state enjoys a government exception under the Employee Retirement and Income Security Act of 1974 (ERISA). Therefore, bringing private sector people in [under ERISA] would jeopardize that and thus the bill may need to be modified. With regard to the effective date, the nonprofits have requested that [be extended]. Representative Rokeberg concluded by noting the importance of this legislation. Number 0820 CHAIR COGHILL announced his intention to bring SSHB 315 before the committee on Thursday, March 28, 2002. Therefore, SSHB 315 was held over.