Shaheen and Scott Applaud Passage of PACE Act by U.S. House of Representatives

(Washington, DC) – U.S. Senators and Jeanne Shaheen (D-NH) and Tim Scott (R-SC), both former small business owners and members of the Senate Committee on Small Business and Entrepreneurship, today applauded the House of Representatives for passing the Protecting Affordable Coverage for Employees (PACE) Act (H.R.1624).  In April, Senators Scott and Shaheen (D-NH) introduced the PACE Act (S.1099) in the Senate, and have since been building momentum to address this issue on behalf of small and mid-sized businesses, their employees and their families.

The PACE Act, which currently has 44 cosponsors in the Senate, protects America’s small businesses from potential healthcare premium increases under the Affordable Care Act by ensuring the federal government maintains the current definition of a small group market as 1-50 employees.  It also gives states the flexibility to expand the size of group markets if the conditions in their state necessitate the change. 

“While health care reform continues to sharply divide Congress, I’m very pleased that we’re making progress to improve current law in a bipartisan way,” said Shaheen. “This legislation would make a helpful adjustment to the Affordable Care Act for small and mid-size businesses in the Granite State by limiting potential premium increases and letting the states determine what’s best for their market. Passage in the House is a big step forward for this common sense proposal and I’m optimistic we can do likewise in the Senate.”

“Today’s vote in the House is an important step forward in stopping small and mid-sized businesses in South Carolina and across the country from seeing drastic premium increases under the Affordable Care Act,” said Scott.  “The PACE Act will help prevent negative impacts on businesses that offer health care to employees and their families. I will continue to work with Senator Shaheen and my other Senate colleagues to move this important measure to the President’s desk.”

Currently under the Affordable Care Act, on January 1, 2016, the definition of the state based small group markets is scheduled to change from 50 to include employers with up to 100 employees. This change would require many small and mid-sized businesses to be subject to different rating rules and requirements, with the potential of increasing the health insurance premiums for small businesses, their employees and their families.   

According to a recent report, if the small group definition moves to 100, premiums could increase by approximately 18 percent for a majority of the mid-sized employers.  As a result, many employers may choose to self-insure instead of remain in the small group market because those employers will no longer be subject to the various requirements of the small group market.  This could further increase the premiums for those left in the newly expanded risk pool

The PACE Act is backed by a coalition representing small and mid-sized businesses, including the U.S. Chamber of Commerce, the National Retail Federation, the National Restaurant Association, the National Federation of Independent Business, and has bipartisan support from state regulators and health policy experts.