Shaheen-Scott Measure to Protect Small Businesses from Potential Healthcare Premium Increases in 2016 Heads to President’s Desk

Washington, DC – Today, U.S. Senators Jeanne Shaheen (D-NH) and Tim Scott (R-SC) praised the Senate's passage of the PACE Act (H.R. 1624), which protects America’s small businesses from healthcare premium increases under the Affordable Care Act. Senators Shaheen and Scott authored the Senate version of the bill (S. 1099) and both serve on the Senate Committee on Small Business and Entrepreneurship. 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.

“Granite Staters want to see Democrats and Republicans working together for the good of New Hampshire and the country,” said Shaheen. “While the Affordable Care Act continues to divide Congress, today we’ve made real progress towards improving this law. This legislation will make a helpful adjustment to the Affordable Care Act for small and mid-size businesses by limiting potential premium increases and letting the states determine what’s best for their market. This bill is a win for businesses across this country, a win for bipartisanship and I’m very pleased it’s headed to the President’s desk.”

“I am pleased that the U.S. Senate has passed this important, bi-partisan legislation to prevent drastic premium increases for America’s small and mid-sized businesses that provide health insurance to employees and their families.  As a former small business owner, I know that when the government forces you to spend more money on something, that means less money for raises, bonuses and creating new jobs," said Senator Scott. “I want to thank the forty-five co-sponsors for working with me on this important effort to support businesses on Main Street in South Carolina and throughout the country.  I look forward to President Obama quickly signing this measure because it is vital that we maintain the current definition of a small group market and give states the flexibility to expand the size of group markets if the conditions in their state necessitate the change.”  

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.