Prescriptions for the health insurance affordability crisis

There are few things that impact small businesses and their employees more than the soaring costs of health insurance.

These escalating costs curtail the growth of some businesses and threaten the viability of others. Many small businesses cannot offer group coverage, making it difficult for them to compete for talent. Too often, sole proprietors must choose between health insurance at a larger company and their dream of opening a business.

Politicians from both sides of the aisle are failing the small business community with respect to health insurance reform. Democratic politicians may hope for universal health care, but it seems a long way off. Any policymaker who puts all their eggs in that basket does not see the urgency of the health insurance crisis.

Republicans did small businesses no favors by allowing the ACA premium tax credits to expire and have been short on solutions. Neither party has done enough to enhance competition in the health insurance market.

But there are some immediate measures which Illinois politicians can take to stabilize the cost of health insurance. Let’s start with recent news about Association Health Plans (AHPs). There are efforts building around AHPs which together, can pave the way for small businesses and self-employed individuals to join together through already existing organizations and negotiate better health insurance rates and benefits.

There is federal legislation that will allow AHPs and it seems the current administration has recently started to explore rulemaking as an option. Enacting policies that provide for AHPs should be a bipartisan effort so long as participants receive quality health insurance coverage. There is a tremendous need for more options in the health insurance space and AHPs can provide additional choices for small businesses and self-employed individuals struggling to afford coverage.

Illinois politicians can also improve the health insurance landscape for employers by passing legislation that will provide a two-year tax credit to businesses that provide their employees with Health Reimbursement Arrangements (HRAs). Through HRAs, businesses can set aside a fixed amount of money each month that employees can use to purchase individual health insurance or pay for medical expenses tax free. HRAs provide employers with more predictability and strengthen the individual market. HRAs have also been proven ways to help employers offer some level of health insurance benefits for the first time.

The SBAC will strongly advocate for a bill that provides this tax credit in 2027. This legislation only applies to businesses with fewer than 50 employees, will be worth up to 20% of the employers contribution to the HRA the first year and 10% the second. There will be a cap of $1,200 per employee the first year a business receives the credit and $600 the next.

You can play a big role in helping to advance these and other policies that will make quality, health insurance coverage more affordable. Consider reaching out to your federal and state legislators and asking them to support these policy proposals. Reach out to us with more ideas about health care reform. The collective voice and engagement of the small business community can be a catalyst which finally compels politicians to prioritize health insurance solutions over partisan politics.

• Elliot Richardson is president and co-founder of the Small Business Advocacy Council.