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New law will let businesses negotiate lower rates for health insurance
By Scott Miller
Staff Writer
Gov. Mark Sanford has signed legislation allowing small businesses to band together to buy health insurance for their employees, his office announced.
While noting the legislation won’t be the silver bullet that cuts health care costs for good, Sanford has listed it among his top three priorities, naming it alongside highly publicized proposals to reform immigration and DUI laws.
The measure will allow a group of at least 10 employers to pool their purchasing power when negotiating insurance rates.
The existing law required insurance cooperatives to have at least 1,000 eligible employees.
Advocates have said businesses could save 20% on health insurance costs, but the bill’s true impact remains unknown.
Many of the restrictions from the existing law remain in place. Businesses still must partner with “common” industries, and co-ops still can’t exclude members because of previous claims experience or risk.
The S.C. Chamber of Commerce has said the bill likely won’t change the law enough to benefit small businesses. Currently, only about 40% of businesses with fewer than 50 employees can afford to provide health insurance, according to figures from the chamber.
The chamber said health insurance costs are the second-highest expenditure for businesses after wages. Health-related costs have forced some businesses to stop offering insurance to their employees.
Among other initiatives, the chamber said it supports increasing the state’s tax on tobacco and using the money to provide health care coverage to uninsured employees.
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