Relief for Small Groups Under the Affordable Care Act (ACA)

On Monday, Congress and President Obama together repealed one of the Affordable Care Act’s most onerous provisions, which prohibited so-called “small groups” (mostly groups with less than 50 employees) from offering health plans with deductibles higher than $2,000 for single coverage and $4,000 for family coverage.

This comes as very welcome news to small businesses, who are frequently the most in need of additional options and flexibility when it comes to offering employees comprehensive, affordable health insurance via higher deductibles and other cost-sharing mechanisms.

It is also great news for employers wanting to couple their insurance plans with health reimbursement arrangements (HRAs), which federal agencies previously rejected as permissible ways to ease the burden of the $2,000/$4,000 provision.

It will be interesting to see how quickly insurance companies will re-introduce these alternatives and how aggressively they will be priced.  Stay tuned!!!

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