We’ve become so accustomed to delays or changes surrounding implementation of the Affordable Care Act (ACA), it would not surprise us if the passage of the PACE Act went unnoticed. Of course you received several emails telling you that President Obama signed the Protecting Affordable Coverage for Employees Act (PACE), but what does it really mean to you?
If you are an employer with approximately 50 to 99 full-time employees (including full-time equivalents), the PACE Act is probably good news for you.
Prior to the ACA, most states defined small employers as those with less than 50 employees. In the group health insurance market, small employers were subject to different rules, including how their policies were underwritten. The ACA intended to redefine “small employer” to mean all employers with less than 100 employees. Beginning January 2016, employers with 50 to 100 employees would for the first time be considered a “small employer” and subject to the ACA’s rules governing small employers.
Application of the ACA’s rules governing small employers to employers with 50 to 100 employees would have imposed strict community rating rules that would likely result in substantial premium increases and would require coverage for “essential health benefits” which may also contribute to higher premiums.
Because the PACE Act was passed, employers with 50 to 100 employees can breathe a sigh of relief.
What remains the same:
- Employers with less than 50 employees are eligible to purchase group health insurance on the exchange (SHOP)
- Beginning in 2016, employers with 50 or more employees must offer health insurance to their full-time employees or pay a fine under the Employer Shared Responsibility Provision
- Beginning in 2015, employers with 50 or more employees must comply with the ACA reporting requirements
If you have any questions regarding the ACA and its impact on your health insurance plans, please contact a member of our Vizance team.
This communication is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice.