By: Zack Pace, SVP, Benefits Consulting
In August, at the request of Employee Benefit News, I wrote ACA myths: A baker’s dozen. Based upon the popularity of that article and the continuing ACA confusion, I prepared the following sequel: 8 myths about the Affordable Care Act. I hope you enjoy it.
Since then, Congress easily passed the PACE Act and the President signed the bill. Based upon the news reports, one might not realize that Congress and the President have made significant, incremental progress in repealing and modifying certain cumbersome aspects of the ACA, especially as they relate to employers. Since 2010, for example, we’ve now seen the repeal of:
That the Federal Government doesn’t seem keen on taking credit for this bipartisan cooperation might be a symptom of the problem.
Specific to the Maryland / DC / Virginia region, the impact of the PACE act is confusing and incongruent. As it stands, following is our understanding of the impact:
Some months ago, Annapolis included a clause that would automatically change the definition of small group back to less than 51 should the Federal definition change. Thus, at this point, small employer once again means an employer employing 50 or fewer full-time employees + full-time equivalents.
Meanwhile, you may recall the new Maryland Stop Loss Law we wrote about back in June. This law refers to small employers as defined by the Maryland Insurance Code, which according to Insurance Department Bulletin 15-27, uses the federal definition. In effect, what this means is that for all small employer health insurance purposes, at this point, small employer means an employer employing 50 or fewer employees. This is true for small employer health insurance purposes, stop loss purposes, and SHOP purposes.
Some time ago, the Virginia insurance law was amended to increase the definition of small employer to mean an employer employing 100 or fewer employees. Because this is the definition in the law it will require an additional law to change the definition back to 50 or fewer employees in accordance with the PACE Act.
Nevertheless in accordance with transition authority, the Virginia Bureau of Insurance has affirmed that insurers can continue to renew plans as small employer plans even if the employer size falls between 50 and 100. This transition relief is available for renewals occurring on or before October 1, 2016. It appears that the Virginia legislature may, prior to that time, change the law.
In the meantime, what this means is that while an employer with, for example, 75 employees, may renew their Virginia based fully insured plan January 1, 2016 in large group, if they change carriers, the new carrier must place them in small group.
Washington, DC is retaining a small employer definition of 50 or fewer. What this means is that the planned mandatory expansion of DC HealthLink into the 51+ employee space is suspended, indefinitely.
You can stay current with the latest ACA developments via our Health Reform Bulletin site.
You can reach me on firstname.lastname@example.org or via Twitter. My collection of LinkedIn essays is located here. My Employee Benefit News articles are available here.