N.H. Lawmakers Approve Gov. Lynch’s Small Group Insurance Reforms

Health insurance rates for small businesses in New Hampshire will undergo another sea change after the House voted to support the governor’s reform plan.

The reform is expected to help businesses with older or sicker workers. Among other things it stops insurers from considering worker health in setting premiums. Insurers can look at worker age and the type of industry in setting rates.

It also would help businesses located in areas where health costs are higher. Insurers would not be allowed to consider geography.

The plan limits premium increases to no more than 20 percent per year, except for increases based on inflation. The new rules would cover businesses with fewer than 50 employees.

Once premiums are set, if a small business has individuals with very high medical expenses, the insurance company could participate in a reinsurance pool, where all insurers would contribute.

The plan marks a major reform in current law, which two years ago was adjusted to allow insurers to gather information on the health of the employees it was insuring.

Many legislators complained that this triggered skyrocketing rates for many of the smallest business owners, especially those with workers who had chronic health problems.

“The phone calls we received were from the people who were the oldest and the sickest,” said Rep. Steve DeStefano, D-Bow.

Supporters of an amendment that would keep health status as a factor argued this reform goes too far.

“If you think you got a lot phone calls under (current law), hang onto your hat,” predicted Stephen Stepanek, R-Amherst. He said the changes will raise rates on thousands more businesses than the current law did.

Others opposed the governor’s plan because of the reinsurance pool. Requiring all health insurance companies to pay for the pool represents a new tax, argued Rep. Michael O’Neil, R-Hampton.

Debate also centered on which approach would attract more insurers to the state. Supporters of the governor’s plan say the reinsurance pool will reduce risk for smaller insurance companies and bring in more business into the state.

Opponents say companies that have come into the state over the last two years will now leave, including those offering new health savings accounts.

“All the new alternative products will be gone. Do we really want to throw the baby out with the bath water?” asked John Hunt, R-Rindge.

The bill, approved earlier by the Senate, heads to the governor, who plans to sign it into law.

Gov. John Lynch thanked lawmakers in the House for their support.

“No longer will insurance companies be able to discriminate against sick workers, or dramatically increase rates on small businesses just because they are located in the Seacoast or North Country,” Lynch said in a statement.

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