Employee health forms set to bite the dust: a vestige of the days when N.H. had no community rating.

Those health forms that employees of small businesses are required to fill out so the company's insurer can assess health risks will be a thing of the past, pending Gov. John Lynch's signature enacting Senate Bill 468.

The forms--which some critics have called intrusive--were a vestige of that period between 2003 and 2005 when lawmakers temporarily ended community rating for businesses with fewer than 50 employees. During that time, insurers could charge higher rates to small businesses with employees who had higher health risks--which is why the forms were required. The Legislature brought back a modified version of community rating in 2005, letting insurers take age and occupation, but not employee health, into account in setting premiums.

Still, the forms remained. That's because lawmakers created a small business reinsurance pool that would cover risky employees. So while insurers couldn't raise their premiums for groups that would file a lot of claims, they really weren't taking a risk. Those claims would be passed on to the pool.

However, said Sen. Maggie Hassan, D-Durham, this pool benefited some insurers more than others. Small insurers didn't have the underwriting capability to fully take advantage of the pool. Others did away with the forms as a selling point, since employers and employees both hated them. That primarily left Anthem Blue Cross and Blue Shield, the only company large enough to primarily benefit from a pool that everybody had to pay into.

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The Senate voted to eliminate the pool altogether. (This small-group pool should not be confused with the high-risk pool for individuals, which was slightly modified by the bill, but left intact.)

Smaller insurers, said Hassan, could just buy catastrophic reinsurance that would pay for the catastrophic claims after they happened. "Why should we spend precious health-care dollars on medical underwriting when we don't need to?" she asked.

She also thought that insurers would manage the health care of high-risk individuals better if they couldn't pass on their claims to somebody else.

But opponents, like Sen. Bob Clegg, R-Hudson, said that this would mean that insurers would swallow more risk in covering small groups that would obviously generate a lot of claims. And those claims would drive up the price of insurance, or make it even less likely that they will enter the market. This, he argued, would hurt small businesses, not help them.

If Governor Lynch signs the measure, the forms will be history after June 30.

Bob Sanders can be reached at [e-mail].