{"id":738,"date":"2015-09-24T17:53:05","date_gmt":"2015-09-24T17:53:05","guid":{"rendered":"https:\/\/albanknews.com\/?p=738"},"modified":"2016-02-25T20:15:11","modified_gmt":"2016-02-25T20:15:11","slug":"expanded-small-business-definition-in-2016","status":"publish","type":"post","link":"https:\/\/albanknews.com\/?p=738","title":{"rendered":"Expanded Small Business Definition in 2016"},"content":{"rendered":"<p>There are three different definitions in PPACA for a \u201csmall\u201d business that can cause confusion\u2026.<\/p>\n<ul>\n<li>A small business is less than 25 employees for purposes of the small business premium tax credit.<\/li>\n<li>A small business is defined as less-than 50 full-time employees and full-time equivalents for purposes of the \u00a74980H employer mandate.<\/li>\n<li>Then there is another definition of a small business for purposes of the PPACA group insurance market reforms.<\/li>\n<\/ul>\n<p>It is this third definition that is the subject of this writing. PPACA set the definition at 100 or fewer employees but allowed the states leeway to use 50 or less until 2016. Businesses that are between 50 and 100 will therefore be impacted on Jan.1, 2016 by two major \u201csmall\u201d group reforms already imposed on less than-50 businesses.<\/p>\n<p><strong><u>Essential Benefits Package<\/u><\/strong><\/p>\n<p>Group policies that cover between 50-100 employees will be required in 2016 to include this core package of benefits\u2026.<\/p>\n<ul>\n<li>Ambulatory patient services<\/li>\n<li>Hospitalization<\/li>\n<li>Maternity and newborn<\/li>\n<li>Emergency services<\/li>\n<li>Prescription drugs<\/li>\n<li>Mental health and substance abuse coverage<\/li>\n<li>Preventive and wellness including the women\u2019s wellness package<\/li>\n<li>Laboratory services<\/li>\n<li>Pediatric services including oral and vision care<\/li>\n<\/ul>\n<p>Indeed, only small groups (defined as 100 or less in 2016) are required to have this package. These are of course broad categories of services, but the law stipulated that each state designate a \u201cbenchmark\u201d plan which all policies must mimic regarding the specifics of each category. Options were available, but most states chose as their benchmarks the best-selling small group policy in their state. Thus if the benchmark plan covers chiropractic, all small group plans must do likewise.<\/p>\n<p><strong><u>Community Rating<\/u><\/strong><\/p>\n<p>This is a mandate that again 50 and under group plans have already experienced and the impact on premium cost is not necessarily inconsequential. Individual employer plans for 50-100 groups will no longer be rated based on their own claims experience and demographics after this year. All plans similarly situated will be pooled and rated collectively; similar to grading on the curve. The only rating variances allowed are:<\/p>\n<ol>\n<li>By <u>coverage category<\/u>; i.e. single, family, etc.<\/li>\n<li><u>Geographic<\/u> rating area. HHS allowed each state to establish rating zones. All insurers operating in a state must use this system. HHS has available on its CMS web site the rating zones for each state, if you have any interest: <a href=\"http:\/\/www.cms.gov\/cciio\/programs-and-initiatives\/health-insurance-market-reforms\/state-gra\">cms.gov\/cciio\/programs-and-initiatives\/health-insurance-market-reforms\/state-gra<\/a><\/li>\n<\/ol>\n<ul>\n<li><u>Age<\/u>: The insurer is not allowed to charge the oldest participant more than three-times the rate it charges the youngest (age 21). There are three age brackets: 0-20; 21-63; and 64 and older. For large families only the three oldest children can be charged. Insurers must use something called a \u201cuniform age rating curve\u201d developed by the states which is to specify a relative distribution of rates across all age bands. HHS developed a default age curve for use in states that do not provide such guidance. The bottom line is that younger insureds pay more and older insureds pay less.<\/li>\n<\/ul>\n<ol>\n<li><u>Tobacco use<\/u> may be surcharged but by no more than 50 percent. States or insurers have the flexibility to determine the tobacco surcharge based on age, but not exceeding the 1.5:1 ratio. Tobacco rates can be assessed only on those who are of legal age to purchase tobacco products in the applicable state. \u201cTobacco use\u201d is defined as the use of any tobacco product on the average of four or more times per week within no longer than the past six months. Tobacco use also must be defined in terms of when a tobacco product was last used. The regulation says thus an insurer can ask the applicant:\u00a0\u201cWithin the last six months, have you used tobacco regularly, meaning on an average of four times a week?\u201d And,\u00a0\u201cIf yes, when was the last time you used tobacco regularly?\u201d<\/li>\n<\/ol>\n<p>An insurer in the small group market is required to offer a participant the opportunity to avoid the tobacco surcharge by participating in a wellness program that meets the standards outlined in PPACA.<\/p>\n<p>Additionally, insurers were ordered to send out bills with a rate for each participant on the plan \u2013 instead of the traditional group rate for all participants for single, family, etc. The employer is then allowed to average rates as it sees fit and assesses employees accordingly in the spirit of group insurance. What many previous \u201csmall\u201d businesses learned was that if they had a good loss ratio, their premium costs would none the less increase dramatically to account for all the poor plans tossed into the same pool where rating curves were smoothed out. Therefore many were offered the opportunity by the carriers to change plan year and \u201cearly renew\u201d in order to put off the price jump for a few more months. Similarly, many 50-100 employers will have that same opportunity at the end of the year.<\/p>\n<hr \/>\n<p><em>Not everyone is an expert on health care reform. But the folks at\u00a0<a title=\"J. Smith Lanier\" href=\"http:\/\/http\/\/www.jsmithlanier.com\">J. Smith Lanier<\/a>, one of our endorsed services providers, are.\u00a0 For this reason they created a publication called the\u00a0Health Care Reform Alert. J. Smith Lanier has been providing these to its clients since 2010 when the bill was passed and now offers it to the members of ABA.\u00a0It is J. Smith Lanier\u2019s intention in the alerts to take the many pages generated\u00a0by the Centers for Medicare and Medicaid Services, U.S. Department of Labor or Treasury and filter them down into terms that all can understand. For more information on how J. Smith Lanier can help your bank, contact\u00a0<a title=\"Tom Younger\" href=\"mailto:tyounger@jsmithlanier.com\">Tom Younger<\/a>\u00a0at\u00a0(256) 890-9027.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>There are three different definitions in PPACA for a \u201csmall\u201d business that can cause confusion\u2026. A small business is less than 25 employees for purposes of the small business premium tax credit. A small business is defined as less-than 50 full-time employees and full-time equivalents for purposes of the \u00a74980H employer mandate. Then there is another definition of a small business for purposes of the PPACA group insurance market reforms. It is this third definition that is the subject of this writing. PPACA set the definition at 100 or fewer employees but allowed the states leeway to use 50 or [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":475,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[27,29],"tags":[],"class_list":["post-738","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-health-care-alert","category-hr-news","has_thumb"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/albanknews.com\/wp-content\/uploads\/2014\/11\/HCA.png?fit=500%2C500&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p4Y3P2-bU","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/posts\/738","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=738"}],"version-history":[{"count":2,"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/posts\/738\/revisions"}],"predecessor-version":[{"id":740,"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/posts\/738\/revisions\/740"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=\/wp\/v2\/media\/475"}],"wp:attachment":[{"href":"https:\/\/albanknews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=738"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=738"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/albanknews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=738"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}