The Affordable Care Act’s mandated expansion of the definition of the small group market would limit employers’ health plan options, according to employer groups who are urging the repeal of the mandate before it takes effect in 2016.

Expanding the small group market to include groups up to 100 would not only reduce choice for this segment of the market, it means some employers would be unable to keep the insurer they currently have, according to the Society for Human Resource Management and the National Association of Health Underwriters. The industry groups and more than a dozen other employer organizations are applauding efforts to repeal the ACA mandate through legislation called the Protecting Affordable Coverage for Employees Act (PACE).

The expansion is intended to make insurance more affordable for the smallest employers by expanding the risk pool to include larger companies. It also aims to increase the number of participants in the ACA’s Small Business Health Options Program, also known as the SHOP exchanges.

The PACE bill would maintain the current definition of a small group market as 1-50 employees and give states the flexibility to expand the group size if they feel the market conditions in their state necessitate the change.

“It is in the best interest of employers and their employees that states determine the definition of their small group market,” the groups argue in a recent letter to the bill’s sponsors, Senators Tim Scott (R-SC), Jeanne Shaheen (D-NH), and Michael Bennet (D-CO).

“Repealing the ACA-mandated expansion and returning to the historical role of state determination would allow flexibility and ensure a broad array of coverage options and mitigate dramatic premium increases,” they add.

To read more, click here.

Jeffrey R. Ungvary President