States define the ACA group mandate - Good Neighbor Insurance

PACE Act allows states to define the ACA Group Mandate – Does it impact your organization?

Group health insurance for international staff overseas just got a bit more complicated. Already international organizations with staff overseas were trying hard to comply with the ACA group mandate which requires large groups to provide insurance for their workers.

But now it appears (Due to the PACE Act – see below) that the states define the ACA group mandate, or at least aspects of it, by stating whether 100FTE (full-time employees) or 50FTE define whether a group is large or small.

The definition of a small employer for purposes of MLR, risk corridors, and risk adjustment will follow the State definition.

This appears to be the case through 2017 or until we see another ruling. Until then, states define the ACA group mandate and the ACA group mandate size will be whatever the state says. Either way, groups with staff overseas do not/cannot count those individuals residing overseas towards their group size in order to qualify for insurance. And some carriers have already begun to drop groups under 100 staff due to uneven state regulations.

“Most states have long defined a small group as consisting of 50 or fewer employees, which is how the term was defined by the Health Insurance Portability and Accountability Act,” Timothy Jost, a professor at the Washington and Lee University School of Law in Lexington, VA, said. “Many insurers write only in the large group market, therefore changing the definition of small group would likely result in many groups seeing their coverage cancelled.”

Good Neighbor Insurance has always looked after our smaller groups equally to our large ones. We are something of a champion for smaller non-profit organizations, mid-sized mission agencies and faith-based groups with a presence overseas, and the large numbers of social good businesses and social entrepreneurs overseas that simply don’t have the staff to gain the attention of many health insurance carriers, regardless of how states define the ACA group mandate.

See what Cigna, one of our carriers has said here.
— In regards to reporting and filing 10-94 and 10-95 forms

The Small Business Administration discusses businesses with over 50FTEs.

See what BlueCross has said here.

See what Aetna has said regarding groups, and regarding individuals.
— In regards to reporting and filing 10-94 and 10-95 forms

See what United Healthcare has said here.

Historically, insurance has been regulated in large measure by each state. Therefore, the laws regarding health insurance offered by the different types of employers can vary significantly from state to state. The states regulate fully insured group plans. Implementation of the ACA gives the federal government more authority over larger group health insurance plans than has previously been the case. This is having a big impact on groups with 51-100FTEs. (see Repeal of Small Group Market Expansion Signed into Law: Amendment to the Affordable Care Act has big implications for employers with 51-100 workers By Stephen Miller, CEBS 10/5/2015 at SHRM.org)

This Amendment to the Affordable Care Act has big implications for employers with 51-100 workers.

Small Business Redefined: On October 7, 2015, President Obama signed into law the Protecting Affordable Coverage for Employees (PACE) Act. The PACE Act amends the definition of “small employer” in the Affordable Care Act (ACA) so that it would continue to apply to employers with one to 50 employees, rather than changing to one to 100 employees as of 2016 as provided in the original ACA; however, the new legislation also allows states to opt for the one-to-100 employee definition of small employer if they choose.
On October 19, 2015, the Centers for Medicare and Medicaid Services (CMS) released a series of frequently asked questions explaining how it will implement the PACE Act. States may elect to extend the definition of small employer to cover employers with up to 100 employees by any means that is legally binding under state law, as long as the definition applies to all insurers, including those in the Small Business Health Options Program (SHOP) program.

What constitutes a State election to extend the definition of small employer?

Any State action that extends the definition of a small employer to include employers with up to 100 employees that is legally binding on health insurance issuers in the State will constitute an election to extend the small employer definition

for purposes of the PACE Act.

Such an election may be made through any State action within the authority of the applicable State regulatory agency that makes the definition legally binding on health insurance issuers in the State. If a State makes this election, the definition of small employer must be applied uniformly to all health insurance issuers in the State, including those in the Small Business Health Options Program (SHOP).

See the PACE Act here: https://www.congress.gov/114/plaws/publ60/PLAW-114publ60.pdf

See the DEPARTMENT OF HEALTH & HUMAN SERVICES FAQ on the PACE Act here: https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQ-on-the-Impact-of-the-PACE-Act-on-State-Small-Group-Expansion.pdf

For more, see http://www.ncsl.org/research/health/small-business-health-insurance.aspx

The information and advice on this website was deemed accurate when it was originally published. GNI cannot accept any responsibility or liability for any actions taken on the basis of the information provided, unless that information is subsequently confirmed in writing. For the latest up-to-date information please call us or check brochures and other published materials for latest revision/date.

PACE Act allows states to define the ACA Group Mandate – Does it impact your organization?

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