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North Bay Business Journal

Monday, July 7, 2014, 6:30 am

Bill would allow small employers to keep health plans

Helps small companies; won’t lock in rates

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    A California Senate bill that would allow businesses with 50 or fewer employees to keep existing health plans for an extra year to comply with the Affordable Care Act appears poised for approval, giving small employers a temporary reprieve on plan designs if and when it passes.

    Sen. Mark DeSaulnier

    Sen. Mark DeSaulnier

    Senate Bill 1446, sponsored by Sen. Mark DeSaulnier, D-Concord, is currently awaiting approval and has been ordered to the consent calendar. It appears there is little opposition.

    The bill would give employers more flexibility with their health plans for the next two years, but rate increases could still be a factor, said Victor McKnight, a principle with EPIC Insurance Brokers in Petaluma.

    “The day it gets signed, any group that has not yet renewed onto a new (Affordable Care Act) plan for small groups will be able to keep their plan for two years,” he said. “Not at the original rate, but they won’t be forced off.

    “It’s good for small businesses that they have the choice,” he added.

    But rate increases “are all over the board,” Mr. McKnight said, making it difficult to predict what renewal season will look like this early, even with any added stability stemming from SB 1446.

    Victor McKnight

    Victor McKnight

    “I’ve seen some (plans) for (Sept. 1) renewal that (had) 75 percent increases for slightly altered benefits,” he said.

    Insurance Commissioner Dave Jones has backed the bill, along with the California Chamber of Commerce, the California Restaurant Association and Small Business California, among others.  

    Even insurance carriers are seemingly on board, including the largest.

    “This is a bill and effort that Anthem supports,” spokesman Darrel Ng told the Business Journal. “We’ve been closely monitoring the bill as it moves through the legislative process and are ready to implement it if or when the governor signs the bill.”

    Commissioner Jones and the Department of Insurance are sponsors of the bill, which includes an urgency clause and would go into effect immediately if signed by the governor.

    “Many small employers will choose to move to the new health insurance options right away, but our bill will give small employers more choices about what coverage to purchase for their employees. It is important to provide some flexibility as we transition to the new coverage options,” Commissioner Jones said in a release.

    Employers with 50 or fewer workers are not required to provide insurance. Employers with more than 50 will eventually be required to provide insurance for full-time employees, but that provision, known as “pay or play” was delayed until Jan. 1, 2015.

    The small employer policies that could be renewed under this bill are already required to comply with many ACA and state-based reforms, including preventative health care coverage without co-pays or deductibles, a ban on lifetime caps, the inclusion of maternity care, coverage for autism and the elimination of gender discrimination in setting premiums, according to the Department of Insurance.

    “This bill continues California’s commitment to the successful long-term implementation of the Affordable Care Act,” Sen. DeSaulnier said in a statement.

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