"SMALL BUSINESS INSURANCE PROMOTION ACT OF 2004"

making health insurance more affordable and accessible for America's small businesses

° Tax credit to help defray the costs of health coverage and encourage more employers to offer coverage:

± Available to any small employer (up to 50 employees) or self-employed individual that offers employees coverage through a qualified pooling arrangement.

± Credit equal to 50 percent of the cost of health insurance coverage.

± Credit is offered as an incentive for 4 years.

± Employers who increase number of employees (beyond 50) after qualifying for credit do not get penalized and can still receive the credit for all employees.

± To provide additional economic stimulus, even small employers who currently offer coverage can qualify for tax credit, if they use credit to participate in coverage pool and take advantage of it in initial offering.

° Qualified pooling arrangements lower cost and help make coverage more accessible:

± The bill provides seed money for states, at their option, to establish a small employer health insurance pool.

± Office of Personnel Management establishes a national insurance pool.

± Employers choose which pool to participate in.

± Guaranteed quality coverage -- coverage in each pool must be substantially similar to health benefits coverage offered in any of the four largest health plans in the Federal Employees Health Benefit Program (FEHBP).

± Pools include protections to ensure all small employers and their employees can get, keep and afford coverage.

± All employers and their employees are guaranteed coverage -- insurers may not exclude employers or their employees and they can not charge some employers or employees more because they are sick.

± Pooling arrangements are available to all small employers and the self-employed (even those not using the tax credit).

± Secretary to study expanding the pools to other employers.