A proposed Ohio law could help small businesses shop for affordable health insurance by letting them see details on expensive health insurance claims, though critics say it would violate employee medical privacy.
For employees with a claim that’s $30,000 or more, Senate Bill 227 will allow insurers to provide companies the amount paid toward that claim and the health condition being treated.
The bill was just approved by the Senate and House insurance committees but still would need to be called for a floor vote by the end of the legislative session later this month.
Small businesses with group health insurance plans aren’t typically given access to claims data and have to purchase health insurance policies with little data to shop around.
Some business owners say this leaves them shopping for one of their largest business expenses — often second only to payroll — with little information to go on.
“It is unintuitive that we make our health insurance purchase decisions with a very limited amount of data as to why we pay what we pay,” testified Tony Kopyar, executive vice president of HR for AXIA Consulting, a 70-employee firm in Columbus.
But critics say this will violate employee medical privacy and motivate unscrupulous employers to let go of employees who need expensive health care.
Fred Gittes, president of the Ohio Employment Lawyers Association, said his organization opposes the bill, saying employers have no control over treatment decisions and can’t negotiate with providers for lower prices.
“Group policyholders can only negotiate with the health plan issuer for better rates and coverage,” Gittes said. “Importantly, under the Affordable Care Act, claim costs, claimant diagnoses, and the potential for catastrophic claims cannot, by law, affect insurance premium rates.”
The bill also raises privacy concerns, he said. Although SB 227 does not authorize claim information by name or date of occurrence, he said employers know from other sources, such as leave requests and requests for accommodations under short-term disability programs, who is making the insurance claims.
And while federal laws forbid using health care information when making decisions on firing and layoffs, Gittes said the information will tempt some managers to reduce claims costs by getting rid of employees with expensive health care needs.
Ohio Insurance Agents, Ohio Association of Health Underwriters and Ohio Association of Health Plans all support the bill.
Ohio Association of Health Underwriters stated in written testimony that this information will empower employers to shop all funding arrangements and benefit designs available.
State Sen. Matt Huffman, the bill’s sponsor, has testified that the legislation will help small businesses shop among insurance providers to lower their costs.
This claims data is needed by employers to promote high quality health insurance, yet insurers often refuse to provide such information, he said in his committee testimony.
“Simply put, small employers need access to their own data in order to determine the most cost effective way to provide health plan benefits to their employees,” Huffman said.
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