By Pension and Benefits Editorial Staff
Since the implementation of the Patient Protection and Affordable Care Act’s (ACA) reforms in 2014, enrollment in small group plans (those with less than 50 full time employees) has declined, according to a recent analysis from the Commonwealth Fund. However, while enrollment in small group plans has declined, substantially more small business owners and workers now have coverage than prior to the ACA because many have been able to take advantage of subsidized individual plans through the ACA’s marketplaces.
The Commonwealth Fund analyzed the financial data filed by small-group insurers with the federal government and found that over the 2014 through 2016 period, enrollment in the small group market decreased an average of 1 million per year. However, the study noted that this decline began before the implementation of the ACA, and hopes that the law might reverse this trend have not been fulfilled.
The ACA did lead to a large increase in coverage for small business employees, because many were able to enroll in coverage through the health benefit exchanges or in expanded Medicaid. The uninsured rate among small-firm employees dropped by 8 percentage points from 2013 to 2016, according to U.S. Census data.
The Commonwealth Fund also noted that there have been several major market improvements. First, people who purchase small-group insurance have substantially more consumer protections than they did before the ACA. Among the most important is the guarantee that preexisting medical conditions will no longer jeopardize coverage or result in higher premiums. People who work at or own small firms have also benefitted considerably from the individual market. The availability of subsidized coverage in the individual market has allowed previously uninsured workers and owners to obtain coverage when the company remains unable to purchase a group plan.
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