By Gene Meyer
March 11, 2010

(KansasReporter) TOPEKA, Kan. –  A divided House Taxation committee voted Thursday to send a controversial insurance plan to the full House for debate.

Panel members voted 11-9 to recommend passage of House Bill 2682, which would allow Kansas employers to set up health reimbursement plans to help pay insurance premiums for workers who buy their own privately underwritten health insurance rather than participate in a group plan at work.

Proponents say the plan will allow small business owners to provide at least some medical coverage for workers even if costs for group plans are rising out of control for many.

“We’re in a tough economy and small businesses will do what must to survive,” said state Rep. Virgil Peck, a Tyro Republican supporting the measure.

“Some have, and more will, drop their coverage without a plan such as this,” Peck said.

Opponents say that the plan ultimately would reduce health benefits for workers because splitting coverage between individual policies, which often are better deals for healthier buyers, and group plans will pull too many people out of the group plans for employers to continue offering them.

“This will for all intents and purposes eliminate affordable group insurance,” said state Rep. Steve Lukert, a Sabetha Democrat.

The panel voted down a proposal by state Rep. Tom Hawk, a Manhattan Democrat, to avoid potentially gutting group plans by allowing employers to set up the reimbursement accounts only if they hadn’t previously offered a group plan in the last five years.

One problem with that approach, said state Rep. Arlen Siegfreid, an Olathe Republican, “is that when employers reach the end of their rope with the cost of group plans, they would cancel and offer no coverage for five years.”