The House and Senate passed legislation this week that gives mid-sized businesses a bit of hope. If signed by the president, companies with 51-100 employees will no longer be considered “small businesses” under the Affordable Care Act.
The news is a (possible) welcome reprieve for many businesses in the 51-100 employee range. Under previous Obamacare regulations, those employers’ health plans would have been subject to the small group market’s rating restrictions and benefits requirements, which would have burdened nearly 64% of them with higher premiums (18% on average), according to an actuarial study by Oliver Wyman Consulting. That’s because the Affordable Care Act actually imposes more costly benefit mandates on individual and small group health insurance policies than it does on large employer plans. So while Congress has typically exempted small employers from a requirement imposed on larger businesses, in this instance, the opposite was true.
Obamacare’s expansion of the small group market, originally set to take effect in 2016, was designed to help small businesses get a better deal by broadening the risk pool in the market. In addition, expanding the small group market would have made more businesses eligible for coverage through the Small Business Health Options Program, the insurance exchanges set up for small businesses. But the potential rise in premiums made it a no-go for many, and there has been wide bipartisan support to undo it.
Will the president sign it? I’m not so sure. While it’s true that higher premiums make for unhappy constituents, signing this bill could be seen as an admission by Obama that benefit mandates are unfair. After all, if workers in companies with 50-100 employees should not be subjected to Obamacare mandates because doing so would result in higher premiums, less flexibility, and new barriers to coverage, then how is it just to subject people with individual and small group plans to those same mandates? Obama’s not up for reelection, but his healthcare plan is. Only time will tell how he responds to attempts to unravel it.
