CQ: House Small Business Chairman Pushes Back on Essential Benefits Rule
December 12, 2012
By Jane Norman 

Small businesses are concerned about the costs of the health care law’s essential health benefits provisions as more information emerges about how they will be implemented, according to a letter the chairman of the House Committee on Small Business is sending to the Obama administration.

The Department of Health and Human Services unveiled a proposed rule on essential health benefits on Nov. 26. In a letter to HHS Secretary Kathleen Sebelius, Republican Sam Graves of Missouri asked that she consider the burden on small businesses in formulating a final rule. Graves said that in some cases, state benchmark plans may not cover all the essential benefits.

“Virtually all small businesses will be forced to supplement state-selected policies that will not include coverage for mental health, substance abuse, pediatric dental and vision, habilitative care and additional prescription drugs,” wrote Graves.

Many small-business owners will struggle to afford any health insurance coverage, let alone the supplemental coverage envisioned by the proposed rule, he said. Others will opt to pay the law’s penalty, he said.

Small-business owners are telling the panel that the cost of health insurance continues to rise and there’s not enough flexibility given the “expensive and mandatory” categories in the law, he said.

The law covers some but not all small businesses. It requires employers with more than 50 workers to provide health insurance or pay a penalty when the law goes fully into effect in 2014. Those with fewer than 50 employees are exempt if the employees receive tax credits through the exchange to help subsidize their care. In addition, some small businesses may qualify for a tax credit.

Under the proposed essential health benefits rule (See related story CQ HealthBeat, Nov. 20, 2012), health plans in the individual and small group market have to provide coverage in 10 broad categories included in the overhaul law (PL 111-148, PL 111-152).

Plans sold both inside and outside exchanges must comply. States are supposed to choose benchmark plans on which essential benefits will be modeled though not all have done so yet.

In separate letters sent Monday, the U.S. Chamber of Commerce asked for an extension of a 30-day comment period on the essential health benefits rule as well as two others dealing with health insurance market rules and user fees on insurers (See related story CQ HealthBeat, Nov. 30, 2012). Chamber officials said in the letters that the regulations will affect nearly all chamber members as they attempt to understand health law regulations and groups representing business need more time to submit meaningful comments.

Comments on essential health benefits and insurance market rules are due Dec. 26 and comments on the reinsurance rule are due Dec. 31.