President Obama recently signed into law an amendment to the Affordable Care Act (ACA) that ensures that the original definition of “small group health plan” will stay in effect. The definition of small group health plan has always covered employers with between two and 50 employees. However, that definition was scheduled to change to two to 100 employees in 2016. This change could have substantially broadened the impact of certain insurance market reforms that currently do not impact employers with more than 50 employees. For example, large group plans do not have to provide essential health benefits but small group plans do.
Additionally, as Senator Tim Scott (R-SC) stated, the scheduled change would have “required many small and mid-sized businesses to be subject to different rating rules and requirements, with the potential of increasing the health insurance premiums for small businesses, their employees, and their families.” Since Congress and President Obama agreed on cancelling the scheduled change, employers with between 51 and 100 employees will not be subject to additional mandates and different rating rules. This is, for once, some welcome news for employers regarding the Affordable Care Act.