Some members of Congress still hope to find a way this term to help small businesses provide health coverage.

Senate Democrats recently succeeded at blocking S. 1955, a bill introduced by Sen. Michael Enzi, R-Wyo., that would have permitted small businesses to buy coverage through “small business health plans.”

Enzi responded to past proposals for creating self-insured “association health plans” by requiring that the SBHPs buy their coverage from state-regulated health insurers. But critics said other S. 1955 provisions would have created a federal health insurance regulatory system and all but eliminated the effect of state benefits mandates.

The bill also would have preempted state laws that limit how much insurers can vary premiums from one small business to another, critics said.

Reports are surfacing that the defeat of S. 1955 may increase support in the Senate for compromise legislation introduced by Sen. Olympia Snowe, R-Maine.

Snowe’s bill, S. 406, would leave coverage mandates intact in at least 26 states.

The National Association of Health Underwriters, Arlington, Va., is one of the groups involved in efforts to keep small group health coverage reform in play.

NAHU is, in general, opposed to AHP legislation and other legislation “that creates an unlevel playing field,” NAHU Chief Executive Officer Janet Trautwein says. “We are, however, open to discussions on proposals that create new affordability while maintaining a level playing field and protecting state-based regulatory authority.”

Trautwein is hoping any proposals that surface will share at least some characteristics with S. 1955.

All states “would have benefited from the availability of plans with fewer mandates,” Trautwein says. “S. 1955 would have helped some states a lot, particularly some in the New England area where tight rate bands and community rating are commonplace. The cost of small employer health insurance in those states is dramatically higher than in states that have a more flexible rating structure.”

But, even under S. 1955, the majority of states would have seen no change in their state rating rules, Trautwein says.