On Wednesday, October 7, President Obama signed into law an amendment to the Affordable Care Act that leaves it up to states to determine whether to increase the limits for their small group markets from businesses with 1–50 employees to include those with 51–100 employees in 2016. The amendment, Protecting Affordable Coverage for Employees Act (PACE, H.R. 1624), had bipartisan support in both the U.S. House of Representatives and Senate.
Since the Affordable Care Act went into effect, the small group market has been defined as companies with 1–50 employees; however, on January 1, 2016, the small group market would have automatically expanded in all states to include companies with up to 100 employees. Under PACE, states will now determine whether or not to expand their small group markets and Small Business Health Options Program (SHOP) Marketplace, which helps businesses provide health coverage to their employees.
Opponents of PACE contended that the automatic addition of businesses with up to 100 employees to all state SHOP Marketplace pools would have lowered the costs of health insurance premiums, while proponents argued that the original legislation’s stricter requirements for the small group market would have resulted in higher premiums. (For more on PACE, see last week’s Bookselling This Week.)
David French, senior vice president for government relations for the National Retail Federation, a supporter of PACE, described the law as constructive reform.
“Restoring state control of small-market health insurance rules will protect affected employers from much higher premium costs and more burdensome mandates,” French said. “Companies in this size range [51–100 employees] might not be large, but they shouldn’t be branded ‘small’ if it’s going to cost them money.”
Before PACE was signed into law, John Arensmeyer, founder and CEO of the Small Business Majority, a national small business advocacy organization, issued a statement expressing the group’s opposition to the amendment. Arensmeyer said requiring states to expand the small group market to 100 in 2016 would have increased the size of the insurance pool and that would have benefited the health care system overall.