WASHINGTON – A House panel on Tuesday approved legislation intended to help small businesses provide health care coverage to their employees.

The bill, which is similar to one being pushed in the Senate by Sen. Olympia J. Snowe, R-Maine, allows small businesses to band together to reduce their health care costs. It was approved by a subcommittee on Tuesday and sent to the House Education and the Workforce Committee. The legislation has the support of President Bush and 118 House co-sponsors.

The Small Business Health Fairness Act creates rules for associated health plans, which Republicans say will allow small businesses to afford health insurance. Democrats say the bill allows the small businesses to provide “stripped-down health plans.”

If signed by President Bush, the bill would let groups such as the National Retail Federation and the National Roofing Contractors Association pull hundreds or thousands of small businesses together to purchase health insurance.

Snowe’s bill in the Senate that has gathered seven co-sponsors. The bill is waiting action in the Senate Committee on Health, Education, Labor and Pensions.

Small-business lobbying groups support the bill, but critics worry about the strictness of the plan’s requirements and whether the plans would “cherry-pick” the healthiest patients by requiring higher premiums for businesses with employees that are likely to have higher health costs.