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The Wagner Law Group

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 


Established in 1996, The Wagner Law Group has 22 attorneys engaged exclusively in employee benefits, estate planning and employment law. Six of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.





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The Wagner Law Group


  Integrity | Excellence



Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110

Palm Beach Gardens 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418



Tel: (813) 603-2959

Fax: (813) 603-2961

101 East Kennedy Boulevard

Suite 2140
Tampa, FL  33602 


San Francisco

Tel: (415) 625-0002

Fax: (415) 358-8300

315 Montgomery Street

Suite 904

San Francisco, CA 94104


St. Louis

Tel: (314) 236-0065

Fax: (314) 236-5743
100 South 4th Street, Suite 550
St. Louis, MO  63102 







October 15, 2015


 Health and Welfare Law Alert




 Legislation Amends ACA's Definitions of Large and Small Employer





President Obama has signed into law the Protecting Affordable Coverage for Employees Act ("PACE") which amends the Affordable Care Act's ("ACA's") definitions of "small employer" and "large employer" for the purpose of state health insurance laws. In effect, PACE repeals the ACA's mandatory expansion of the small group market to include employers with up to 100 employees.


Background. Under ACA, health insurance provided in the small group market must be "community rated," meaning that it must satisfy rigid underwriting requirements designed to avoid different premiums based on health factors, and it must cover all essential health benefits required by ACA. These requirements do not apply to health insurance offered in the large group market.


Before PACE, the ACA would have required every state to expand the definition of the small group market to include employers with up to 100 employees, beginning in 2016. Accordingly, employers with 51 to 100 employees would have been reclassified as small employers for state insurance law purposes. Because the community rating and other requirements for policies in the small group market tend to make policies for healthy groups cost more than underwritten policies, these employers became concerned about steep health insurance price increases and the loss of benefit design flexibility that would have resulted from the application of the small group market rules.


PACE Act. PACE amends the ACA's definition of "small employer" to mean an employer that employed an average of not more than 50 employees during the preceding calendar year.


By amending the ACA's small employer definition, PACE decreases the number of employers that are considered "small," thereby decreasing the number of employers to which the small group market insurance restrictions may apply. However, it should be noted that PACE does not affect the ACA's definition of "applicable large employer" that is used for determining whether an employer is subject to the employer shared responsibility provisions. Accordingly, employers with 50 or more full time employees and full time equivalents will still be applicable large employers, beginning in 2016.


State laws. Under current law in most states, employers with one to 50 employees are considered small employers while employers with 51 to 100 employees are considered large employers. PACE leaves the one to 50 definition in place, although states have the option of expanding the definition of small employer to cover employers with up to 100 employees, if state insurance authorities believe that market conditions in their state necessitate the change and state legislatures pass such measures.


Action Steps for Plan Sponsors. Despite PACE's repeal of the ACA's mandatory expansion of the small group market, plan sponsors should be cognizant that PACE provides states with the option to define their small group markets as including employers with up to 100 employees. Accordingly, plan sponsors with 51 to 100 employees should determine whether they will be considered a "small" or "large" employer under applicable state law and whether the changes PACE makes to these ACA definitions will affect the health insurance they ultimately offer to employees.






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This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.