Insurance Commissioner Issues Bulletin on PACE Act

14 Oct Insurance Commissioner Issues Bulletin on PACE Act

October 8, 2015 – President Barack Obama signed into law H.R. 1624, the Protecting Affordable Coverage for Employees Act of 2015 (“PACE Act”).  The PACE Act makes relatively minor changes to the Patient Protection and Affordable Care Act (“ACA”), as well as the Public Health Service Act; each of which defines “large” and “small” employers for determining how employers must provide health coverage for their employees.

Republican Senator Mitch McConnell had this to say about the bill, “[It] will help protect small and medium-sized businesses that provide healthcare to their employees, give states more flexibility to define what constitutes a small business for health insurance purposes so as to protect health benefits for workers, lower health premiums, and reduce cost for taxpayers.”

The PACE Act works to protect smaller employers from increased regulations while granting their employees the option to keep current health insurance plans. Although the small group market is currently defined as 1-50 employees, that definition is set to expand to 1-100 employees in 2016. The new regulations would prevent employers with 51-100 employees from keeping their current health care plans. Plus, the new mandates would cause rates for health care plans to dramatically increase.

However, the PACE Act will allow individual states to decide whether or not to maintain the previous definition of small group market as employers with 1-50 employees.

Contact AWS Insurance today to schedule an appointment with one of our agents, specializing in corporate health insurance, to protect your company from this new legislation.

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UPDATE: Louisiana Insurance Commissioner, James Donelon, has issued Bulletin 2015-07 which gives all issuers and producers of health & accident coverage transitional relief. The transitional relief outlined in the Bulletin pertains to the new definition of “small employer” in the Public Health Service Act, as amended on March 23, 2010.

The term “small employer” means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least 1 but not more than 100 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year.

The revisions in Act 718 of 2014 contained a provision, which read as follows:

Any rate proposed to be used by a health insurance issuer shall be submitted and controlled by this Subpart. However, the commissioner shall have the authority to grant transitional relief from the provisions of this Subpart.

The Subpart for which the commissioner has the authority to grant transitional relief contains the definition of “small employer” and “large employer.” The transitional relief granted by Donelon shall be effective for any policy or plan renewed, issued, or issued for delivery on or before December 31, 2016.

According to the newly issued Bulletin and Donelon, “The clear result of this transitional relief is that the definition of ‘small employer’ in the state of Louisiana on January 1, 2016, for both rating and non-rating purposes shall extend only to those employers that employ an average of at least 1 but not more than 50 employees on business days during the preceding calendar year and who employ at least 1 employee on the first day of the plan year.” pertain to the newest updates to the Affordable Care Act with regard to defining the size of small business for health care purposes. These provisions have been repealed by the PACE Act mentioned above.