small business ADA compliance

By: Christina Merhar (ZAne Benefits) October 2015

Recently, Congress passed a bipartisan change to the Affordable Care Act’s definition of a small employer, sending the measure to President Obama’s desk. If signed into law, the federal requirement to expand the small group market to mid-sized businesses in 2016 would be halted. Let’s take a quick look at what the bill is, and what it means for small and mid-sized employers.

What is the Bill?

The bill (H.R. 1624), called the Protecting Affordable Coverage for Employees or PACE Act, addresses a provision in the Affordable Care Act that changes the definition of a small employer in 2016.

As currently written, the Affordable Care Act defines a small employer as employing one to 50 employees. In 2016 the definition of a small employer is set to change to employers with one to 100 employees.

As currently written, this provision forces businesses with 51 to 100 employees into the small group insurance market in 2016, where they would face new coverage requirements. For many businesses, the new coverage requirements would lead to higher premiums and plan changes.

The PACE Act preserves the traditional definition of “small group,” but allows states to expand it to include employers with 51 to 100 employees, if they wish to do so.

What is the Status of the Bill?

The bipartisan bill passed the House on September 28, 2015 and passed the Senate on October 1, 2015.

The bill is now being sent to the President’s desk, where The New York Times reports Obama is expected to sign it into law.


Under current health law, mid-sized employers are gearing up to make required changes to their health insurance plans to meet small group market reforms. If signed into law, however, the PACE Act would halt this federal change and allow states to establish the definition of a small group.

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