Senator Russ Feingold (D-Wisc.) has reintroduced the Promoting Health Care Purchasing Cooperatives Act (S. 1165), a bill that would authorize the Secretary of Health and Human Services (HHS) to award grants to certain groups of employers to develop health care purchasing cooperatives. The legislation includes a grant application process for both self-insured and small businesses.

To qualify for such grants, consortiums of two or more self-insured employers or non-self insured small businesses (those with 99 or fewer employees) would need to apply for a grant to conduct a feasibility study regarding the establishment of a health insurance purchasing cooperative. The study would need to take into account, among other things, the ability of the group to effectively pool the health care purchasing power of employers, and the ability of the group to provide data to employers to enable them to make data-based decisions regarding health plans. The consortiums would then need to submit the study results to the HHS Secretary, who would then determine whether to award the group a grant to create the cooperative itself.

In addition, the health insurance purchasing pool would need to meet the following criteria:

• be a nonprofit organization;
• be wholly owned, and democratically governed by its member-employers;
• exist solely to serve the membership base;
• be governed by a board of directors that is democratically elected by the cooperative membership using a 1-member, 1-vote standard; and
• accept any new member in accordance with specific criteria, including a limitation on the number of members, determined by the Secretary of the HHS.

This bill has been referred to the Senate Committee on Health, Education, Labor and Pensions.