Virginia’s 2020 Legislative Session was a ‘Mixed Bag’ of Healthcare Wins and Losses for Small Businesses

Virginia’s 2020 legislative session produced a ‘mixed bag’ of wins and losses for the state’s small businesses. The most direct impact on small businesses came from several pieces of legislation that will fundamentally alter the state’s healthcare system.  In some respects, important strides were made to uplift small employers, but on the other hand, several bills advanced that could undermine small business owners’ bottom lines.

On the positive side, we applaud the passage of legislation (HB 1428) to establish a state-based exchange to facilitate the purchase and sale of health plans. Given that healthcare is among the top concerns for Virginia’s small businesses and that thousands of entrepreneurs are uninsured, a state exchange will go a long way in helping to lower costs and streamline the enrollment process.

Similarly, the Assembly advanced legislation (SB 404/HB 1037) to place minor restrictions on short-term limited duration health plans (STLDs), otherwise known as “junk plans.” While this was a step in the right direction, we would have liked to see bolder action taken to protect Virginia’s small business owners and employees. The Assembly missed an important opportunity to further restrict the use of short-term plans and require that insurance companies spell out in no uncertain terms what plans do and do not include. Most small business owners are not healthcare experts and placing the onus on them to decipher complex health terminology is unreasonable.

In direct opposition to the improvements made to Virginia’s healthcare system was the passage of two bills (SB 861 and SB 235/HB 795) to further deregulate the purchase and sale of association health plans (AHPs). These plans are particularly harmful to small businesses because they are sub-par insurance veiled by the illusion of stronger purchasing power and lower costs. In reality, these plans are exempt from covering essential health benefits and can discriminate on the basis of past medical history. If enacted, AHPs will split the small group market in two, creating a pool for younger, healthier firms and a second pool with higher rates for firms that have employees with pre-existing conditions.

As these bills head to Governor Northam’s desk, we urge him to act swiftly to sign the state exchange into law, amend the short-term bill to further restrict these non-compliant ACA plans, and immediately veto any legislation that would allow AHPs to further disrupt the market.

###