AIMBlog_Logo_Resized

Health Reform Change will Help Massachusetts Employers

Posted by Katie Holahan on Oct 2, 2015 1:21:00 PM

A rare show of bipartisanship in Congress appears likely to give Massachusetts the ability to sidestep a provision of federal health reform that threatened to boost premiums for companies with 51-100 employees.

USCapitol1The House of Representatives and Senate this week passed by voice votes a bill that would amend a provision of Obamacare forcing those employers into the merged health-insurance market for small companies and individuals. The shift would have raised rates for many employers with payrolls of 51 to 100 because they would subject to more stringent actuarial value, cost sharing and essential health benefit requirements, as well as state rating rules that have not applied to them.

Instead, the Protecting Affordable Coverage for Employees (PACE) Act will continue to classify 51-100 employee companies as large employers unless states decide to treat them differently.

The White House indicates that President Barack Obama plans to sign the bill.

“The opportunity for Massachusetts to maintain the current health-insurance rating system for employers with 51 to 100 workers is great news for the state economy at a time when health costs appear to be accelerating,” said Richard C. Lord, President and Chief Executive Office of Associated Industries of Massachusetts.

“The PACE Act promises to provide predictability and benefit-plan flexibility for employers moving forward.”

AIM has been pressing for more than a year for regulatory or legislative relief from the expansion of the small-group market. The federal government in August approved a transition period allowing the 51-100 companies to buy insurance under current rating system until October 1, 2016, instead of the January 1, 2016 date established by the Affordable Care Act.

The cost of health insurance is already showing signs of accelerating for small employers after several years of moderate increases. The Massachusetts Division of Insurance has approved premium increases averaging 6.3 percent for the first quarter of 2016 for companies with 1 to 50 employees. That’s more than double the 3.1 percent average increase that small business saw in the first quarter of this year.

PACE "is a smart health care bill aimed at protecting workers’ benefits, lowering premiums and reducing costs to taxpayers,” Senate Majority Leader Mitch McConnell, R-Ky., said after clearing the bill.

Jeanne Shaheen of New Hampshire, the Senate bill’s lead Democratic sponsor, also applauded the move in a statement. “While the Affordable Care Act continues to divide Congress, today we’ve made real progress towards improving this law,” she said.

AIM continues to lobby for the same sort of state flexibility on a separate provision of federal health reform affecting rates for smaller employers. Massachusetts has for many years used 11 rating factors in its merged individual and small-business health insurance market, but federal health reform is phasing that number down to four, a change that is adding significant turbulence to the small-group health market.

Topics: Health Care Reform, Health Care Costs, U.S. Congress

Subscribe to our blog

Posts by popularity

Browse by Tag