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House and Senate Pass ACA Small Group Expansion Changes

Yesterday, the Senate passed The Protecting Affordable Coverage for Employees Act (PACE) through unanimous consent which followed the House’s passage through a voice vote earlier this week and is now heading to President Obama for signature.

The legislation amends the ACA, which was to mandate small group expansion of 50 employees to groups of up to 100 employees planned to go into effect on January 1, 2016.  The act provides the flexibility for each state to determine the size of their small-group market instead of being forced into a national standard. It's expected that in those states that stay with the original definition of 50 employees, that significant premium increases will be averted, particularly for those employers who are fully insured.

With strong bipartisan support in both the House and Senate, the bill is expected to be signed by the President. The New York Times reported this morning that “a White House spokeswoman confirmed that Mr. Obama would sign the bill, but she declined to discuss its substance." Recent comments by administration officials suggested that they did not particularly like the legislation, but could not stop the growing wave of bipartisan support for it. The House and Senate bills included 234 and 44 bipartisan co-sponsors respectfully. 

The push for this legislation has had overwhelming support from many trade associations including the National Health Underwriters Association, America’s Health Insurance Plans, the BCBS Association, the U.S. Chamber of Commerce and the National Association of Insurance Commissioners. Yet, despite the expected White House signature and strong support, changes at each state level may not readily occur.

Many insurance carriers and insurance commissioners have been planning for the expansion of small group to 100 employees since the passage of the ACA. The actual definition may have also been adopted within the states own regulatory process requiring individual state legislative approval. States will have to act immediately prior to adjourning their session for the year or go into emergency session if already adjourned. With open enrollment beginning in a few weeks, there may simply not be enough time.

However, we know that many groups with 50 to 100 employees may opt to “early renew” in the fourth quarter to delay the provisions of the original bill. When they renew for 2016, they will now most likely have many more options depending on what each carrier decides given the flexibility of the new legislation.

We will continue to keep you informed of these legislative developments regarding small-group expansion. In the meantime, please visit www.benefitmall.com or www.healthcareexchange.com for many of BenefitMall’s health care reform related resources.