Oct 02, 2015

ACA Update: Could Be Major Win For Small Businesses Providing Health Insurance

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The House Sept. 28 passed legislation that would keep the current definition of small group health plans at 50 or fewer employees, thus preventing a major and burdensome part of the Affordable Care Act from taking effect. 

Legislation that would make a small but significant bipartisan fix to Obamacare has cleared both chambers of Congress, and it’s now up to President Obama to determine whether it will become law. And while the subject matter is small, the precedent for responsible change to the contentious Affordable Care Act is huge. This COULD represent a major win for small businesses providing health insurance, depending on what the final methodologies are.

H.R. 1624, the Protecting Coverage for Employees Act (PACE), passed the House under suspension of the rules, a procedure used to pass legislation expeditiously without amendment. The bill was called for by business groups, state regulators and the health insurance industry.

H.R. 1624 would amend a provision of the ACA set to take effect in 2016 that would include all companies with up to 100 employees in the definition of small group plans. Under the ACA, small group plans are subject to more stringent regulations, including the requirement to cover essential health benefits. Under the bill, firms with 50 or fewer employees would generally be defined as small employers unless their state elects otherwise.

At issue is a provision in the ACA that will require each state to define the small-group health insurance market at 100 or fewer employees beginning in January 2016, up from 50 employees in most states.

What You Need To Know

  1.  The PACE Act would leave the definition of “small group” with the states, protecting employers with between 50 and 100 workers from the much-higher premium costs and more burdensome mandates seen in the small-group market.
  2. If the PACE Act fails to become law, the ACA’s federally mandated expansion of the small-group market definition is not the only new thing coming in 2016. In addition, any business that issues more than 200 W-2 forms in a year must:
  • Submit complicated reports on ACA compliance to the IRS.
  • Appeal any penalty determinations 90 days after the Department of Health and Human Services delivers notices (possible start: April 2016).
  • Pay any unresolved penalties (possible start: mid-2016).

Additional regulatory requirements such as non-discrimination regulations could also surface in 2016.

It is our hope that the PACE Act will open the legislative gates to additional ACA fixes such as setting 40 hours as the standard when mandating coverage for full-time workers, repealing the “Cadillac Tax” and fixing the ACA’s dysfunctional and impossible to navigate reporting requirements.

Here at AWANE, we work hard to provide you with the most up to date legislative updates that affect your business. The Affordable Care Act has caused some of the most challenging times for businesses of all sizes, and we hope to see similar bipartisan motions such as this one in the upcoming months and years.

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