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ACA Changes in 2015 Aid Employer Health Plans

On December 18 President Obama’s signed the $1.1 trillion spending bill, which included bipartisan support from Congress to delay the Affordable Care Act’s unpopular Cadillac tax on employers.

This 40% tax on more expensive health plans will be suspended for 2018 and 2019, with groups such as the National Association of Health Underwriters calling for permanent repeal. The Cadillac tax is now scheduled to go into effect beginning January 2020.

Many employers will also benefit from an earlier revision to the Affordable Care Act (ACA), signed into law by President Obama on October 7, 2015. The Protecting Affordable Coverage for Employers Act amended the definition of “small” employers to remain at 1-50 employees in 2016.

ACA dictates were scheduled to expand the small employer definition to 1-100, depending on each state’s decision. The expanded definition would have challenged many employers who would face new rating and benefit requirements.

“The more restrictive rating and benefit requirements could cause more groups sized 51-100 to self-insure, especially among those whose premiums would increase under the new rules,” the March 2015 brief stated.

Even with this change, ACA mandates continue to challenge these employers. For instance, businesses offering health benefits under ACA are impacted by mandated fees that can increase premiums. Self- funding continues to provide a strong and viable strategy to employers for managing these challenges.


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