Impact of the PACE Act in Arizona
H.R. 1624, better known as the PACE Act, was signed into law on October 7, 2015. The PACE Act amends the provision of the Affordable Care Act (42 USC 18024) that defines small and large group employers. Further, the PACE Act permits individual states to define "small employer" as "...an employer who employed an average of at least 1 but not more than 100 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year."
In light of the changes contained in the PACE Act, Arizona will retain its existing definition of small group insurance under ARS §20-2301(A)(21):
A. In this chapter, unless the context otherwise requires:
21. "Small employer" means an employer who employs at least two but not more than fifty eligible employees on a typical business day during any one calendar year. As used in this paragraph, "employee" shall include the employees of the employer and the individual proprietor or self-employed person if the employer is an individual proprietor or self-employed person.
Further, employee eligibility is determined by the employer under ARS §20-2307(A).
Insurers can modify their small group rates effective the 2nd Quarter of 2016. Insurers are encouraged to review, please review their approved policy forms to see if they contain a contrary definition of small employer. If so, the insurer should file an amendment with ADOI.
Any questions should be directed to Erin H. Klug, Assistant Director, Rate & Form Division: [email protected].