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Democrat proposes PPACA small-group definition alternatives

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A House Democrat has proposed two alternatives to H.R. 1624, a bill that would let each state decide whether to set the maximum size of a small group at 50 employees or 100 employees.

Rep. Frank Pallone, D-N.J., says he would like to see Congress adopt a bill postponing the effective date of the small-group definition change for a few years, or letting states postpone the effective date.

The Patient Protection and Affordable Care Act of 2010 (PPACA) is on track to set the cut-off at 100 employees in all states on Jan. 1.

The National Association of Insurance Commissioners (NAIC), America’s Health Insurance Plans (AHIP) and the National Association of Health Underwriters (NAHU) argue that changing the definition could destabilize the small-group markets in some states, by subjecting midsize groups in those states to the PPACA benefits, rate-setting and underwriting rules that now apply to small employers’ group health coverage.

See also: Why some small-group health submarkets may implode

The NAIC, AHIP and NAHU are supporting H.R. 1624, the Protecting Affordable Coverage for Employees (PACE) Act bill. The bill would make a permanent change in the small-group definition rules and give each state the right to decide whether to set its cut-off at 50 employees or 100 employees.

Rep. Brett Guthrie, R-Ky., the lawmaker who introduced the bill, has lined up 235 sponsors, including 48 Democrats.

Members of the House considered the bill Monday, under a procedure that lets House members consider bills with broad support through a streamlined process. Rep. Tony Cardenas, D-Calif., helped present the bill.

See also: PPACA small-group definition bill nears House floor

House members approved the bill by a voice vote.

Pallone, a strong supporter of PPACA, put a statement in the Congressional Record welcoming Republicans’ willingness to work with Democrats on the small-group definition issue.

Pallone said he opposes letting some states permanently keep the small-group cut-off at 50 employees. “The benefits of expansion such as added consumer protections and increased stability for small employers are important and achievable goals,” Pallone said in the Congressional Record statement.

But “research tells us that some states simply are not ready to expand their small-group market,” Pallone said.

The best solution would be to establish a “transitional delay of the small-group expansion, or an ‘opt out’ option for states,” Pallone said. The alternatives “would ensure the states continue to work towards the goal of expansion, rather than disregarding the provision altogether,” he said.

Democrats have had enough seats in the Senate to keep most bills seeking to repeal or revise PPACA from coming to the floor for a vote, even those bills have had some support from Democrats in the House. Pallone’s statement could be a sign that Democratic leaders have come up with small-group definition fix proposals that would have a relatively easy time coming up for a vote in the Senate.

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