Lindeen: Congress Should Act Now for Small Businesses

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ACA brings new regulations, higher prices to mid-sized employers

HELENA – Montana Insurance Commissioner Monica J. Lindeen testified before Congress today, urging lawmakers to pass a bill that would give states needed flexibility to protect small business owners who offer health insurance to their employees.

Lindeen, who is president of the National Association of Insurance Commissioners (NAIC), spoke before the U.S. House Energy and Commerce Subcommittee on Health in favor of the Protecting Affordable Coverage for Employees, or PACE Act.

“The backbone of Montana is small business,” Lindeen said. “They are proud to offer health insurance to their employees and don’t need new regulations making insurance more expensive for their workers.”

The Affordable Care Act redefined “small group” insurance from insurance for a business with 1-50 employees to a business with up to 100 employees. That regulation goes into effect on Jan. 1, 2016 and requires businesses with between 51 and 100 employees to offer insurance that meets new requirements. Those changes include new benefit requirements and other regulations that could drive up costs for employees.

The PACE Act would allow states to define what “small group” insurance means in each state. In her testimony, Lindeen said that states know best the unique insurance dynamics at play in each state and she warned that in the absence of the PACE Act, a “series of market disruptions could occur.”

Mid-sized businesses have long enjoyed greater flexibility in the kind of insurance they offer their employees. Redefining “small group” insurance to include those who have not traditionally purchased insurance in that market could result in premium spikes for certain groups.

She urged Congress to act quickly on the bill as most employers need final rates and benefit information on available plans by late September as they begin finalizing their benefit packages for their employees for 2016.