Massachusetts has asked the federal Department of Health and Human Services to continue to allow the state to define its small group market as employers with 50 or fewer employees in 2016 as the state prepares to request a state innovation waiver application for an alternative plan for individual and small group health coverage under Section 1332 of the Patient Protection and Affordable Care Act. The law defines small employers as those employers with 100 or fewer full time equivalent (FTE) employees. However, Section 1304(b)(3) of the Affordable Care Act affords states the option – which all exercised – to set the metric at 50 or fewer employees for plan years 2014 and 2015.
Massachusetts Gov. Charles D. Baker made the request in an April 27, 2015 letter to Health and Human Services Secretary Sylvia Burwell. Baker cited the need to maintain stability in its merged individual and small group markets, citing premium rate increases for small employers under Affordable Care Act rules barring medical underwriting of small groups and the increased likelihood employers of 51 to 100 employees would opt to self insure in 2016. Both developments “will further exaggerate” instability in the state’s merged individual and small group markets and prompt Massachusetts to reconsider the continued operation of a merged market, Baker wrote.
Baker’s letter follows a letter to Burwell earlier this year by 17 business groups and the National Association of Health Underwriters requesting the Affordable Care Act’s 2016 expansion of states’ small group health insurance market to employers of up to 100 employees be delayed until 2018. The groups warn broadening the scope of the small group market will lead to market disruption among health insurers that could limit employer coverage options as well as potentially result in premium increases.
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