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ACA Participation Requirements for Small Employers

Posted on March 11th, 2013

ACA Participation RequirementsThe U.S. Department of Health and Human Services (HHS) released final regulations on February 22, 2013 in regards to various health insurance market rules. The new guidance includes information about minimum participation requirements in the small employer marketplace. In most states, small employers are defined as those with 50 or fewer employees. Insurance companies today require a minimum percentage of employees to enroll in coverage. This is referred to as the participation requirements and helps insurance companies avoid adverse selection. Minimum participation requirements can be up to 75% today.

The new regulations indicate that small employers cannot be denied access to group health insurance for failing to meet minimum participation requirements. The guidance does provide some protections for insurance companies to limit adverse selection. Insurance companies will be permitted to limit enrollments in coverage to open and special enrollment periods for small employers that aren't able to satisfy minimum participation requirements. The final rule defines the annual open enrollment period as the time period between November 15th to December 15th of each year. This new requirement will be effective for plan years starting on or after January 1, 2014. 


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Note: The materials contained within are provided for informational purposes only and do not constitute legal or tax advice.


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