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Latest Obamacare change may be significant for small businesses

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The latest Obamacare changes may open the door for small businesses to skirt some health care reform requirements for another couple of years, according to a local adviser.

Attorney Eric Athey is co-chairman of the labor and employment division of Harrisburg-based McNees Wallace & Nurick LLC. He said some of the law's new requirements on what health insurance plans must cover kicked in on Jan. 1, 2014, and many small employers got around those requirements by renewing their health insurance policies early toward the end of 2013.

As the law stood, they would have had to switch to compliant plans for 2015. Now, Athey said, depending on what happens with state regulators and insurers, the companies might be able to keep that noncompliant coverage through Oct. 1, 2017.

The announcement this week was the second extension on existing plans. The first was announced by President Barack Obama in November for existing individual and small group policies, putting the decision in the hands of the states. Pennsylvania chose then to allow, but not require, insurers to renew noncompliant individual policies.

"Today's announcement is limited to the individual market," Pennsylvania Insurance Commissioner Michael Consedine said in a news release at that time. "Many small employers took advantage of the early renewal offers in the small group market and, because of this, no insurer has come to us to indicate its intention to offer additional renewals of non-ACA compliant small group products in 2014."

This week's announcement was made via phone conference with select reporters by senior administration members who asked not to be identified, according to numerous press reports, which said the officials estimated it would affect only about 500,000 individual policyholders and 1 million people working in small businesses. Like the one in November, it puts the decision in the hands of the state.

The Pennsylvania Insurance Department has not issued a response to the announcement.

"It's a big deal for small employers," Athey said. He added that this is the first Obamacare change that he considers purely a political move and that it will be interesting to see what effect the change has on the Obamacare Marketplace, its enrollees and its premiums.

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