The Affordable Care Act requires that all fully-insured employers with fewer than 50 employees, which provide group health insurance, provide plans that are subject to community rating by 2014, and that all employers with fewer than 100 employees, which provide group health insurance, provide community rated plans by their 2016 renewal. Community rated plans do not consider traditional risk factors such as employee gender, health status and occupation in determining premiums. We find that most employers who currently provide group health insurance find that community rates are more expensive than current premiums, and in many cases they are significantly more expensive.
Transition relief established and further expanded in the past years allows employers who have had pre-community rated plans to maintain those plans beyond the dates set forth in the original law. In many circumstances, it is now possible for employers to retain these pre-ACA plans until October 1, 2017. Employers who wish to maximize their transitional relief opportunity may need to take an early renewal in 2015 or 2016, which, of course, is also not without risk. As always, your Business Benefits team is happy to help you analyze the advantages and disadvantages of maximizing your transitionary relief opportunity.
With the recent Supreme Court decision upholding the constitutionality of subsidies through the federal exchange, it stands to reason that the ACA will not change without legislative action, and that significant legislative action is not likely under our current administration, Senate and Congress. This is perhaps another reason to consider maintaining current plans and premium methodologies as long as possible.