NATIONAL FEDERATION OF INDEPENDENT BUSINESS

Testimony of Jack Faris, President of NFIB

Mr. Chairman and Members of the Committee, today I come before you in the name of small businesses. I am Jack Faris, the President and CEO of the National Federation of Independent Businesses. The NFIB is the premier advocacy group representing small and independent business in every state of America.

Our primary concern is the undue pressure this bill imposes on employers. All employers, especially small businesses skillfully balance meeting the needs of their employees with maintaining the viability of their business. The Bipartisan Patient Protection Act of 2001 fatally threatens this delicate balance.

Employers are committed to providing for the needs of their employees. Although financially risky, many small businesses brave the arena of health coverage in attempting to fulfill this commitment. To ensure their employees receive top quality health care, most small businesses "contract out" to health plans that directly provide the health services to company employees. This provision of services takes many forms, but the bottom line is that employers faithfully fulfill their responsibility to their employees, albeit indirectly, through these outside health plans. Hence, another delicate balance is established between small businesses, their employees and the outside health plans.

The Patient Protection Act threatens to disrupt this delicate balance as well. Although this bill is unique in protecting the majority of small businesses from the majority of lawsuits, it continues to expose health plans to needless liability. As employers, employees and health plans are linked, what harms the health plan will necessarily return to harm the employer and employee as well.

Although some have argued to the contrary, the relationship between litigation and the health of a business and employee are clear. It is a lose-loose relationship. Excess litigation leads to excess costs, which leads to excess burden on employers and employees.

Allowing individuals to sue their plans will create a culture of frivolous litigation. This will divert the crucial resources of health plans away from necessary medical care to extraneous legal fees. The financial burden is passed from health plans to employers, both leaving employers fiscally vulnerable and forcing the employer to make difficult decisions such as discontinuing health coverage.

Instead of punishing small business we must commend for extending health insurance to their employees. To blatantly threaten these companies with exorbitant costs is to devalue the difficult decisions they have made on the behalf of their employees. These small businesses are committed to providing for their employees, why endanger this honorable commitment by permitting frivolous lawsuits?

In sum, lawsuits are an unjust burden upon health plans and employers and invariably deter businesses from providing health services. The answer to increased access to and quality of health care lies in encouraging businesses to meet the needs of their employees, not in deterring them. To really "protect patients" this bill should not promote litigation and liability, but coverage and cooperation.

Thank you for your time and I will now happily entertain your questions.