Small Group – Less than 50 Employees
Companies employing fewer than 50 full-time or full-time equivalent employees are exempt from the Pay or Play Mandate. The Pay or Play mandate is the law which states that companies employing 50 or more full-time workers must provide health insurance for their employees and will be penalized with fees if they fail to do so.
Changes for Companies Employing Fewer than 50 Full Time Workers
All companies who sponsor a group health plan and have an employee count under 50 will be subject to community rates. Group plans for fewer than 50 employees will no longer have a tiered rating system of employee only, employee plus spouse, employee plus children or employee plus family, but instead will have different rates for each age of an employee. The rating system will have a 3:1 premium difference for all ages, meaning that the youngest employee will only be 3 times less expensive than the oldest employee of the group. Carriers are now permitted to add surcharge to the premium for employees who are tobacco users. Many carriers are choosing not to implement a tobacco surcharge right away; however they could start using it in the future. However, carriers are no longer allowed to charge different rates due to gender or pre-existing medical conditions. Deductible limits and out-of-pocket costs are also capped at a certain dollar amount. The addition of Essential Health Benefits and new taxes and insurance fees being added to the premium bill will also have an impact financially.