WASHINGTON, D.C. — Ten trade associations representing the entire scope of the auto parts industry, from suppliers to aftermarket, challenged the United States Senate to enact the “Small Business Health Fairness Act” (S. 406). The bill would allow small businesses to purchase affordable health care coverage through a trade association. In a show of solidarity, the 10 groups submitted a joint letter to the Senate urging immediate support for the bill, commonly referred to as “Association Health Plans” (AHPs).
The associations that signed the letter are: Automotive Aftermarket Industry Association (AAIA), Automotive Engine Rebuilders Association (AERA), Automotive Parts Remanufacturers Association (APRA), Automotive Service Association (ASA), Automotive Warehouse Distributors Association (AWDA), Motor and Equipment Manufacturers Association (MEMA), Production Engine Remanufacturers Association (PERA), Specialty Equipment Market Association (SEMA), Service Station Dealers of America (SSDA) and Tire Industry Association (TIA).
These industry organizations represent manufacturers, retailers and distributors of all equipment found in light- and heavy-duty vehicles along with the products and services purchased after the original sale, including replacement parts, tires, accessories, lubricants and specialty chemicals, appearance products, collision and other service repairs as well as the tools and equipment necessary to make the repair.
“Skyrocketing health care premiums have made it difficult for our organizations’ member companies – which are predominantly small businesses – to offer quality health care coverage to their workers,” said the 10 groups in the letter. “As a result, millions of hardworking Americans and their families are joining the ranks of the uninsured. S. 406 would reduce these costs and make health insurance once again affordable.”
Corporations and trade unions are permitted to offer company health plans that are regulated by the federal government. The Federal government offers its own employees a variety of health care plans that are only subject to federal oversight. For everybody else, however, health care plans are regulated at the state level.
Given the lack of uniform state regulations, it has proven impractical for most companies and trade associations to formulate cost-effective plans that would be acceptable in all 50 states. S. 406 would allow trade associations to offer AHPs in the same manner as corporations and trade unions. It is estimated that AHPs would save the typical small-business owner 15 to 30 percent on health insurance and extend coverage to more than 8 million uninsured Americans. The U.S. House of Representatives has passed the AHP measure seven times since 1995, only to have it die in the Senate. The House will likely pass the measure again in late July.
“Our companies compete in the free market – a system that provides incentives for the best products at the lowest prices,” said the groups in the letter. “Unfortunately these businesses are not given the same opportunity when it comes time to select health care insurance. About five big insurers control 75 percent of the small group market in most states. This lack of competition has spurred double-digit rate increases that are unaffordable to many employers and workers. AHPs will create larger pools of employees and lower insurance risks. This will generate competition, stabilize health care costs and provide more coverage options.”
The auto parts industry trade associations stand ready to work with the Senate Health, Education, Labor, and Pensions Committee as it takes up the issue. They believe that S. 406, which has a history of strong bipartisan support, can form the basis for creating more competition and choice in health insurance markets.
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