There are numerous changes for employers in the Affordable Care Act for 2016, among them the shifting definition of a small-group employer and the impact on their health and welfare benefits. As of January 1, the ACA’s definition of a small-group employer expands to include firms with 50-99 employees; previously the ACA defined small employers as having 100 or more employees.
For businesses in that range, this means plenty of challenges. To help small employers address the changes, Corporate Synergies Vice President and Senior Benefits Consultant Mark Grisanti recently spoke with Newsday.
These midsized employers will now be “community-rated” by insurers, meaning their health insurance plans will be pooled together with those of other companies for premium rating purposes. Experts say small-group status will give employers less plan flexibility and doesn’t take into account factors such as employee age that might affect rates.
“It’s a pooled rate,” explains Mark Grisanti.
Mr. Grisanti went on to explain that the rates are filed with the state and are the same for each small-group employer in a given county. Consequently, employers with varying employee demographics could be impacted in very different ways.
Less plan flexibility for ACA’s small-group employers.
So for example, firms with largely older employees could benefit, while firms with a younger workforce may not.
“I have clients on both sides,” says Grisanti, noting the small-group market generally offers reduced plan options and less robust provider networks than the large-group market. “From what I’ve seen, most of my clients are going to see premium increases.”
Mr. Grisanti went on to say that there are several options for small-group employers that will be impacted.
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