From The Business Journals
Congress just gave mid-sized businesses a break: Companies with 51 to 100 employees won’t be thrown into the small group market for health insurance next year under legislation that passed both the House and Senate this week.
Many business groups and the National Association of Insurance Commissioners supported the Protecting Affordable Coverage for Employees Act, which restores the 50-employee threshold for the small group market. The legislation gives states the option, however, to expand it to 100 employees.
Congress restored the 50-employee threshold for the small group insurance market, protecting larger small businesses that feared higher premiums if they were placed into that market next year as scheduled under the Affordable Care Act.
Many businesses in the 51-100 employee range didn’t want to be placed into the small group market because they feared they would face higher insurance premiums. That’s because their health plans would be subject to the small group market’s rating restrictions and benefits requirements.
A study by by Oliver Wyman Actuarial Consulting estimates that 64 percent of employers with 51 to 100 workers would see premium increases averaging 18 percent as a result of being moved into the small group market.
The Affordable Care Act’s expansion of the small group market in 2016 was designed to help small businesses get a better deal by broadening the risk pool in this market. That’s why one small business organization, Small Business Majority, opposed the PACE Act.
Plus, expanding the small group market would have made more businesses eligible for coverage through the Small Business Health Options Program, the insurance exchanges set up for small businesses under the ACA.
Blocking this expansion “is detrimental to SHOP and small businesses looking forward to this option,” said John Arensmeyer, founder and CEO of Small Business Majority.
Most small business groups supported the PACE Act, however, and there was bipartisan support for it in Congress, however. The House passed the legislation by voice vote on Monday, and the Senate followed suit, also by voice vote, on Thursday.
Now the question is whether President Barack Obama will sign the bill.
Sen. Jeanne Shaheen, D-N.H., said she hopes Obama will let this change to Obamacare become law.
“While the Affordable Care Act continues to divide Congress, today we’ve made real progress towards improving this law,” Shaheen said. “This legislation will make a helpful adjustment to the Affordable Care Act for small and mid-size businesses by limiting potential premium increases and letting the states determine what’s best for their market.”