November 17, 2015
On Oct. 30, 2015, Director of Insurance Farmer issued Bulletin 2015-08 related to the definition of ‘small group’ under state law. As background, PPACA included a provision to change the definition of “small employer” from 1-50 to 1-100 employees effective Jan. 1, 2016. On Oct. 7, 2015, President Obama signed into law HR 1624, called the PACE Act, which repeals the mandated small-group expansion from groups of up to 50 employees to groups of up to 100 employees. Thus, unless a state has expanded its definition of small employer, PPACA’s insurance mandates would not apply to employers in the 51-100 group in that state.
South Carolina insurance statutes define a small group as an employer with 2 to 50 employees. As allowed under the PACE Act, South Carolina will keep the definition of small group at 50 employees. Thus, groups with 51 to 100 employees will continue to be rated as large groups and will not be required to switch to the small group market in 2016.
Because previously available transition relief would have allowed redefined groups (with 51-100 employees) to continue to use large group rates until October 2016, rerating plans on a quarterly or semi-annual basis due to the PACE act is not permitted.
Bulletin 2015-08 »