A health law specialist says states can keep small employers with younger, healthier employees from abandoning the insured plan market in 2014 by limiting the small employers’ ability to self-insure.
Mark Hall, a public health law professor at Wake Forest University, makes that argument in a commentary in the new issue of Health Affairs, an academic journal that publishes articles about the finance and delivery of health care.
The latest issue includes many articles on how the Patient Protection and Affordable Care Act of 2010 (PPACA) might affect small groups.
PPACA is supposed to start requiring health insurers to sell small group coverage on a guaranteed issue, community-rated basis starting in 2014.
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If the law takes effect on schedule and works as drafters expect, some small employers will be able to use federal tax subsidies to buy coverage through a new system of health insurance distribution exchanges, and, in some cases, small employers’ employees may be able to use tax subsidies to buy individual coverage through the exchanges.
Today, many small employers hold down coverage costs by buying plans with high deductibles or limited benefits. PPACA will put limits on small employers’ ability to use benefit design to hold down costs, because PPACA will require insured plans to cover at least 60% of the actuarial value of a standardized “essential health benefits” package, Hall says.
PPACA does not provide any new subsidies for individuals paid over 400% of the federal poverty level, or about $89,000 per year, or for small employers with many highly paid employees.