February 9, 2016

On Dec. 18, 2015, the Arkansas Insurance Department issued Bulletin No. 15A-2015, amending the definition of small employer for purposes of the MLR requirement pursuant to passage of the PACE Act. In light of the PACE Act’s passage, and since Arkansas law is currently consistent with federal law (as amended), for plan years that begin on or after Jan. 1, 2016, Arkansas defines small employers as those who employ on average 2-50 employees on business days during the preceding calendar year. Large employers will be defined as those who employed an average of at least 51 employees on business days during the preceding calendar year. Arkansas will not be applying the state option to extend the definition of small group to those employing 1-100. A bulletin issued by the federal CMS clarified that issuers may use the definition of 50 employees as the upper threshold, rather than 100 employees, for purposes of MLR rebates. However, subsequent guidance issued by CMS on Dec. 17, 2015, (see article in the Jan. 12, 2016, edition of Compliance Corner) allowed states to delay implementation of the lower threshold until the 2017 reporting year. It is unclear at this time if Arkansas will be updating this bulletin to reflect the newest CMS guidance.

It is important to note that the PACE Act deals only with from which market (small or large) an employer must buy its plan. It does not alter in any way the PPACA employer mandate that requires an employer with 50 or more full-time equivalent employees to offer an affordable, minimum value plan or face penalties. That federal requirement? continues.

Bulletin No. 15A-2015 »