Senators Propose Federal Health Insurance Purchasing Pool for Small Businesses

Sens. Richard Durbin (D-Ill.) and Blanche Lincoln (D-Ark.) on Thursday introduced a bill to help reduce health insurance costs for small businesses, CongressDaily reports. The legislation would establish a federal purchasing pool, modeled after the Federal Employees Health Benefits Program, for businesses with 100 or fewer employees. The Office of Personnel Management would administer the pool. Under the bill, small businesses that participate in the pool would receive tax credits to cover part of cost of employer contributions, and those that make employee contributions on behalf of low-income workers would receive additional tax credits. Durbin said that the pool would allow small businesses "facing rapidly rising insurance costs to increase their purchasing power," CongressDaily reports. "If you take the model used for federal employees, you have the basis for expanding that opportunity to small businesses," he said. Durbin and Lincoln did not estimate the number of small business employees who would participate in the pool, but Durbin said that the number could reach "in the millions." According to the Employee Benefit Research Institute, about 52 million U.S. residents work for businesses with 100 or fewer employees. Durbin said that two or three Republican senators may support the legislation, but he added that the bill "faces stiff resistance from the insurance industry," CongressDaily reports (Heil, CongressDaily, 3/4).