Great changes are coming to the group health insurance marketplace in Florida. Are you prepared?

ACA DEFINITIONS OF EMPLOYER SIZE

Section 1304(b) of the ACA defines employers as follows:

  1. The term "large employer" means, in connection with a group health insurance plan with respect to calendar year and a plan year, an employer who employed an average of at least 101 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year.
  2. The term "small employer" means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least 1 but not more than 100 employees on business days during the preceding calendar year and who employees at least 1 employee on the first day of the plan year.
  3. In the case of plan years beginning before January 1, 2016, a State may elect to apply this subsection by substituting "51 employees" for "101 employees" in paragraph (1) and by substituting "50 employees" for "100 employees" in paragraph (2)

IMPACTS OF BEING CLASSIFIED AS A SMALL GROUP

A March 2015 brief by the American Academy of Acutaries outlines how the rules applying to groups sized 51-100 will change and what that means for insurance offerings in this expanded small group market:

  1. Among employers offering coverage, employees in groups sized 51-100 comprise roughly 30% of employees in groups sized 1-100.
  2. Groups sized 51-100 will face more restrictive rating rules, which will increase relative premiums for some groups and reduce them for others.
  3. Groups sized 51-100 will face additional benefit and cost-sharing requirements, which could reduce benefit flexibility and increase premiums.
  4. Premiums in the small group market will change to reflect the influx of groups sized 51-100. If the average costs for groups sized 51-100 exceed the current average costs of groups sized 1-50, then rates for groups sized 1-50 would increase as a result.

http://www.actuary.org/files/Small_group_def_ib_030215.pdf

PROJECTED IMPACTS TO SMALL GROUP PREMIUMS Expanding the small group market definition will subject employers with 51-100 employees to ACA small group market rating and benefit rules:

  1. Rating Rules: Actuarial analysis by Oliver Wyman estimates that roughly two-thirds (64%) of members in groups with 51-100 employees will receive premium increases of 18% on average in 2016 as a result of new rating rules. Rates can only be vary based on the age of the enrollees, geographic area, tobacco use, and family size.
  2. Benefit requirements: Employers with 51-100 employees will be required to buy health plans that comply with actuarial value, cost sharing, and essential health benefit requirements. This could increase premiums by an additional 3-5% on top of the impact from changes in rating rules.