Small Group Definition Will Not Change Nationally in 2016 - States Have Flexibility
On October 1, Congress approved a bill repealing the Affordable Care Act (ACA) provision expanding the small group employer definition, which was scheduled to change from 1-50 to 1-100 employees on January 1, 2016. President Obama is expected to sign the bill into law next week.

The repeal legislation, the Protecting Affordable Coverage for Employers (PACE) Act, maintains the current 1-50 employee definition of a small employer and gives states flexibility to expand the small employer definition up to 100 employees if they determine market conditions necessitate the change.

The District of Columbia and several states - CA, CO, MD, NY, VA and VT - have enacted laws or issued regulatory guidance changing their small group definition to the 1-100 employee definition in 2016. With the repeal of this ACA provision, these states may revise their laws/regulatory actions to, once again, conform to the federal definition of small employer. Until then, these laws/regulatory actions remain in effect.

In states that maintain their small group definition at 1-50 employees, the new law allows fully insured plans of employers with 51-100 employees to escape the higher costs of the ACA community-rating requirements. By admitting that the ACA community rating requirements are harmful to employers with 51-100 employees, the politicians have confirmed that the community rates do not make group health insurance more competitive or less expensive. We can only hope that the politicians allow the same freedom to employers with 2-50 employees in the future.

We will continue to help our businesses of all sizes find affordable, compliant health benefit solutions that meet their unique needs.
Please feel free to contact us if you have any questions. 

Thank you, 
George Knox, CLU, ChFC
214.695.2904 (mobile) 214.443.1400 (office) |

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