New laws create more health insurance options for Virginia’s small businesses, realtors

Two new Virginia laws will create health insurance options for two groups of businesses that have felt shut out of more affordable coverage.

One allows associations to set up a benefits consortium that would help small businesses gain the same buying muscle that large employers have for employee health insurance.

“It’s about access to health care, something I’ve worked on my entire career, and affordability,” said state Sen. Monty Mason, D-Williamsburg, who sponsored the measure.

He said the law would help small businesses — those with between 2 and 50 employees — attract and retain workforce by offering health coverage to workers and their families,

The other new law allows the Virginia Association of Realtors to arrange for group insurance for its members.

“It’s a way to make health insurance more affordable,” said Del. Keith Hodges, R-Urbanna, who sponsored the Realtors’ group insurance bill.

Both proposals have been battlegrounds for years, opposed out of concern that they’d take enough people out of the Affordable Care Act health insurance marketplace to push up premiums for everyone else.

The idea with the benefits consortium bill, as pitched to the General Assembly, is that it would allow groups like the Virginia Chamber of Commerce to set up a mechanism that lets small businesses access the relatively low premiums that large employers can command.

Mason said the idea was that consortium would pool tens of thousands of employees of small businesses; by spreading risks over such a large number, the cost per-person is less. The consortium would be run by a board of directors. Any surplus of revenue over claims and required reserves would be used to hold down future premiums.

Mason said he began working on the proposal — his first effort came in 2020 — not long after he gave a talk to a Chamber panel saying he thought the idea was a bad one.

“They asked if we could talk about it, and after they explained what it could do, I said ‘if you decide to go ahead, let me know and I’ll carry it,’” Mason said.

“We intend to form a benefits consortium,” said Laura Ramthun, the chamber’s director of communications and marketing.

The chamber is waiting for the state Bureau of Insurance to write regulations, she said.

Basically, the law says associations would be able to set up something like the self-insured pool that many major employers use, and make its coverage available to small businesses. With self-insurance, instead of buying a policy and counting on an insurer’s financial resources to cover claims, an employer puts up its own funds, usually hiring a company to run the program.

The consortium’s coverage would have to include all the health benefits required in the Affordable Care Act, as well as the cost-sharing and value of coverage standards in that act. It would be barred from denying coverage for pre-existing conditions.

Like workers’ compensation insurance, it would set a base rate for participating companies, and once the companies’ actual experience with claims is none, their specific premiums would be pegged at set percentages above, at or below the base rates, while trends for the entire pool would determine future base rates.

The Realtor’s bill takes a different approach, providing a way for individual members to buy insurance policies with rates like those that groups are quoted, rather than individual market premiums, said Martin Johnson, the association’s senior vice president for government relations.

For some, their income is high enough that they can’t take advantage of the Affordable Care Act’s subsidies. For others who may not be doing as well or who are just starting a career, even with the subsidies, the premiums can feel hard to afford.

“Realtors aren’t like other professionals: they’re independent contractors for the most part. So they can only get insurance in the individual market,” Hodges said.

He said two key points helped him make the case for the bill: the first, that some 20% of Realtors don’t have insurance, so his bill would bring the number of uninsured Virginians down by several thousand.

The second key point was that the bill says any plan the Realtors eventually arrange would have to include at least all the essential benefits required in Affordable Care Act plans.

That mattered because past efforts for alternative health coverage, such as extending periods for short term coverage, faltered when health plans and other opponents said their narrower set of benefits would woo too many healthy people away from ACA plans’ pools. The result would be a spiral of premium increases.

What the bill allows is for the association to shop for a group insurance policy for them — basically for the same kind of group coverage that larger businesses now buy if they don’t opt for a self-insurance program, Johnson said.

The association is talking to insurers and the Bureau of Insurance to see how this could work; whether it goes ahead will depend on the kind of rates it is quoted, Johnson said.

For Realtors who get their insurance through the ACA individual market, but who try to stretch their dollars by not buying as much coverage as they might need, his bill would provide an option to address their insufficient coverage, Hodges said.

After the intense debates before General Assembly committees over the past several years, “there is not much controversy left over it having an adverse impact,” said Doug Gray, executive director of the Virginia Association of Health Plans.

The final version of the benefit consortium bill passed the state Senate 40-0 and the House by 63-35. The Realtors bill passed the House 95-2 and the Senate 40-0.

Dave Ress, 757-247-4535, dress@dailypress.com