Washington, DC – Last week the Senate passed the PACE Act unanimously which protects America’s small businesses from healthcare premium increases under the Affordable Care Act. The House passed the same bill and now it awaits the president’s signature. U.S. Senators Mike Enzi and John Barrasso, both R-Wyo., cosponsored the PACE Act introduced by U.S. Senators Tim Scott, R-S.C., and Jeanne Shaheen, D-N.H.
Currently under the Affordable Care Act, on January 1, 2016, the definition of the state based small group markets is scheduled to change from employers with up to 50 employees to include employers with up to 100 employees. This change would require many small and mid-sized businesses to be subject to different rating rules and requirements, with the potential of increasing the health insurance premiums for small businesses, their employees and their families.
According to a recent report, if the small group definition moves to 100 employees, premiums could increase by approximately 18 percent for a majority of the mid-sized employers. As a result, many employers may choose to self-insure instead of remaining in the small group market because those employers will no longer be subject to the various requirements of the small group market. This could further increase the premiums for those left in the newly expanded risk pool.
The PACE Act is backed by a coalition representing small and mid-sized businesses, including the U.S. Chamber of Commerce, the National Retail Federation, the National Restaurant Association, the National Federation of Independent Business, and has bipartisan support from state regulators and health policy experts.