Insights

May 17, 2016


On April 28, 2016, the Puerto Rico Office of the Commissioner of Insurance issued Ruling Letter No.: CN-2016-199-AS, which sets aside Circular Letter Number CC-2015-1868-D, dated Nov. 24, 2015, and promulgates a transition period during which the PACE Act provisions will be adopted.

As background, the PACE Act repeals a PPACA requirement that changed the definition of “small employer” to an employer with between 1 and 100 employees. The PACE legislation granted the states and the insular jurisdictions the power to decide whether they wanted to keep the original definition of a small group or if they would adopt the definition established in the federal regulations. The Puerto Rico Insurance Code contains the definition established in the federal regulations and currently provides that as of Jan. 1, 2016, employers with 100 or more employees will be considered to be large groups.

This circular letter states that those employers who had up to 50 employees during at least 50 percent of all working days during the previous calendar year will be considered small groups. Employers who had more than 50 employees during at least 50 percent of the business days in the previous calendar year will continue to be considered large groups for regulatory purposes. This transition period will be in effect until Dec. 31, 2017. After that date, the definition of a small or medium sized employer will be applicable to companies that have up to 100 employees.

Ruling Letter No.: CN-2016-199-AS »