The Senate on Thursday unanimously passed a bill that would prevent an Affordable Care Act (ACA) provision from changing the traditional definition of "small employer."
The ACA is scheduled to raise the definition of small employers from companies with fewer than 51 employees to fewer than 101 employees beginning Jan. 1, 2016. The change would subject more companies to the ACA requirement that small businesses offer employee health plans that meet the law's essential benefits requirements.
Presidential candidates' plans to change the ACA
The definition change was included in the law because some believed that reclassifying small businesses would bring millions of new customers into the insurance market and stabilize the industry for small employers. However, the American Academy of Actuaries predicts the change could "result in significant premium-rate changes for some groups," especially among employers with relatively young and healthy employees.
The new legislation would maintain the definition of small employer at 50 or fewer employees, but would allow states to still choose to expand the definition of a small business on their own.
The bill now heads to President Obama, who is expected to sign the measure.
Sen. Jeanne Shaheen (D-N.H.), who co-sponsored the bill, said the measure would "make a helpful adjustment to the [ACA] for small and midsize businesses by limiting potential premium increases and letting states determine what's best for their market."
Shaheen added that she hopes the bill's bipartisan support could trigger more bipartisan ACA fixes, such as repealing the law's medical device tax (Sullivan, The Hill, 10/1; Pear, New York Times, 10/1; AP/Modern Healthcare, 10/1l Pear, New York Times, 9/20).
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