Remarks Prepared for Delivery by U.S. Secretary of Labor Elaine L. Chao For Round Table on Association Health Plans

February 13, 2006

Thank you for that introduction, Tom. [Tom Murtagh, Chairman, NFIB Leadership Council]

I would also like to thank, of course, Chuck Stergiou, Vice President of Puritan Confection Co., for hosting us today.

And thank you to the participants of this important round-table, and to Valerie Acres of the New Hampshire chapter of the NFIB, for gathering us together here in Manchester.

Today, I’d like to share some thoughts about the President’s plan to give small business owners and their employees greater access to quality, affordable health care.

One of the principle ways to do this is through Association Health Plans, which many outside Washington call “Small Business Health Plans.” This allows small businesses to pool their risks, so they have the same kind of bargaining power that large corporations and unions enjoy when purchasing health insurance.

Right now, small employers pay as much as 30 percent more for similar health benefits than large employers. That helps to explain why only 43 percent of employers with less than 50 employees can afford to offer health insurance. In fact, about 61 percent of Americans without health insurance work for small businesses. So this Administration is committed to helping you close that gap.

The Congressional Budget Office estimates that AHP legislation would reduce health insurance premiums for AHP members by as much as 25 percent. And that as many as two million Americans currently without health coverage would receive health benefits through AHPs.

That number might increase further if civic, community and religious groups are also allowed to form AHPs.

This is not only a fairness issue. It’s a competitiveness issue. Small businesses are the engine of job creation in our country. They generate two out of every three new jobs. Health insurance will help small business compete and continue to create new jobs and opportunities.

Those of you who watched the President’s State of the Union address know that ensuring our nation’s competitiveness is one of the President’s highest priorities. He announced an American Competitiveness Initiative — $136 billion over 10 years to strengthen research, innovation and education in our country. The goal is to make America the best place in the world to invest and create new jobs. Workforce development is a key part of that initiative, and that includes helping small and medium sized employers like you retain good workers by offering quality, affordable health insurance.

So with that, thank you so much for inviting me, and now I’d like to hear your views.
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