New Law Revises ACA Definition of Small Employer But Leaves it Up To the States To Extend
The recently passed and signed Protecting Affordable Coverage for Employees Act ("the PACE Act") repeals the provision of the Affordable Care Act (ACA), that would expand the definition of a "small employer" from 1-50 employees to those with up to 100 employees effective January 1, 2016 and allows individual states to decide if they want to move forward with expanding their current definitions of a small employer. This has NOT been repealed in the California legislature. Therefore, unless the legislature convenes and takes action, the expansion of "small employer" to groups of up to 100 employees remains in effect.
Why the fuss over employer sizes? It all comes down to how rates are set in the insurance marketplace. Small group health plans have requirements that large group plans do not and this affects how insurance companies pool risk and therefore price plans.