As previously reported, the PACE Act was signed into law allowing the ACA definition of small employer to remain at 50 or fewer employees, at each state’s discretion, instead of increasing to 100 or fewer employees. The District of Columbia, Maryland, Virginia, and other states had previously passed laws mirroring the ACA definition including the January 1, 2016 increase to 100 or fewer employees.
On October 8, 2015, the Maryland Insurance Administration issued Bulletin 15-27 clarifying that Maryland will retain the 50 employee definition.
On October 20, 2015, the District of Columbia Department of Insurance, Securities and Banking issued Bulletin 15-IB-07-10/20 clarifying that DC will retain the 50 employee definition.
On October 21, 2015, the Virginia Bureau of Insurance published an advisory notice stating that “the Bureau has no authority to administratively preserve the current definition of ‘small employer’, as this will require a legislative change.” Therefore, Virginia will extend the definition of small employer to include employers with 100 or fewer employees effective January 1, 2016. Only new legislation by the Virginia General Assembly can change the definition, and it is not in session again until Wednesday, January 16, 2016. However, as noted in the advisory, Virginia law does provide “transition relief”, which allows insurance carriers to continue renewing existing large group policies for employers with 51-100 employees through October 1, 2016. New policies for employers with 51-100 employees will need to be written in the small group market beginning on January 1, 2016 until new legislation, if any, is passed by the Virginia General Assembly.
We will continue to keep you updated on the status of the Virginia definition. Please contact your Keller account team if you have any questions.