Small Business Health Fairness Act of 2005

  • Date: March 30, 2011
  • Source: Admin
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These are group health plans sponsored by trade, industry, professional, chamber of commerce or similar business associations. These plans would be exempted from important state insurance regulations and consumer protections to provide healthcare benefits to employees of businesses that are association members.


  • Small businesses can increase their purchasing power and make health coverage more affordable.
  • AHPs can operate across states and receive the same kind of protections as plans offered by labor unions and large corporations.
  • Organizations can pay lower health insurance premiums by purchasing such coverage through AHPs rather than through the traditional small employer health insurance market.


The purpose of the Small Business Health Fairness Act of 2005 is for the benefit of entrepreneurs with small businesses to improve access and choice with regard to medical care for their employees.

Problems with Small Business Health Fairness Act of 2005


Failure to Provide Critical Benefits For Women

Under this bill, AHPs could ignore the benefits that are critically important for women.

Denying women access to these services would:

1.       increase the cost of coverage

2.       impact on health for women who cannot afford these services

Lack of Consumer Protection

Most states require insurers to allow direct access to

1.       emergency services

2.       independent external appeal of health care claims denials

3.       health professionals

AHPs would be exempt from these requirements, leaving those with AHP coverage with inadequate protection against potential abuses.

No Aid for the Uninsured

The only way AHPs could offer coverage at a lower price would be by

  1. avoiding state benefit requirements
  2. offering coverage to more healthy individuals

For this reason, AHPs could actually cause the number of uninsured to grow. 


Increased Cost of Coverage

Small businesses and others not covered by AHPs could experience a rise in health insurance costs.

Risk of Fraud and Unpaid Claims

AHPs operating under closer scrutiny by state and federal agencies have made it easy for scam operators to defraud millions of health care consumers. 

This bill will leave consumers at risk for fraud and unpaid medical claims. 


  • Criminal penalties for certain willful misrepresentations (Section 501 of ERISA of 1974 (29 U.S.C. 1131))
  • Imprisonment for false representations not more than 5 years, fine under title 18, United States Code, or both
  • Issuance of cease and desist orders (Section 502 of such Act (29 U.S.C. 1132)
  • Responsibility of AHP boards of trustees for certain claims procedures.


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