Tuesday, June 30, 2015

Affordable Care Act “Small Employer” Definition Changes in 2016

Dave Kyllo
 
  
A significant change impacting small employers with up to 100 employees is on its way under the Affordable Care Act (ACA). For plans years beginning in 2016, the definition of “small employer” expands to employers with 1 to 100 employees on and off the exchanges. Currently, the definition of small employer includes only one to 50 employees.  
 
According to the American Academy of Actuaries, the change is likely to mean that for groups with 51-100 employees:  
  • More restrictive rating rules in 2016 resulting in higher premiums for some groups and lower premiums for others;
  • Added benefit and cost sharing requirements;
  • The likelihood that more employers in this category will self-insure.
It is also worth noting that beginning in 2016, those employers with 50 – 100 employees will face new “shared responsibility penalties.” Employees with 1- 49 employees will not be subject those penalties.   
 
Employers with 1-50 employees may also be touched by the expanded definition of “small employer,” if adverse selection occurs in the 51 – 100 employee group. Adverse selection occurs when large numbers of sick or unhealthy individuals acquire health insurance and healthier individuals don’t choose to get health insurance. If adverse selection occurs in the 51 –100 employee group, those in the 1-50 employee group could see their premiums increase. 
 
The ACA is complex and choosing the right employee health insurance coverage can be daunting task for providers. Before making a final decision about their 2016 coverage, AHCA/NCAL members are encouraged to check out AHCA/NCAL Insurance Solutions. This “Members Only” program is designed to give AHCA/NCAL members access to brokers who understand long term care and who truly know the ACA and its myriad requirements. 
 
More importantly, AHCA/NCAL Insurance Solutions is designed to save members money on one of their largest workforce expenses. For more information, contact Dave Kyllo (202-898-6312) or Nick Cianci (860-416-5333) or email us at AHCA/NCAL Insurance Solutions.  

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