Obamacare keeps getting less and less strict on small employers—and more costly for individuals.
President Barack Obama signed “doc-fix” legislation on April 1 to prevent cuts in Medicare payments to doctors. Buried inside that legislation, however, was a nice break for small companies: It eliminated the Affordable Care Act’s deductible limits on small-group health plans. (The ACA defines small groups as those with fewer than 50 full-time equivalent employees.)
Obamacare originally had required that small-group health plan deductibles be limited to $2,000 individuals and $4,000 for families. Now, small groups don’t have any restrictions on how high plan deductibles can go.
The policy change was supported by Republicans and Democrats alike.
“Repealing this provision will give employers more flexibility over the type of health care options they can offer their employees, and will expand the use of high-deductible plans paired with Health Savings Accounts (HSAs),” Republican House Speaker John Boehner said. “This will help families keep their private insurance through their employer, rather than be forced to go on an Obamacare exchange with fewer options and higher costs. That’s a win for families and small businesses.”
Despite the enthusiasm over the deductible limits change, it was already taking place in practice. Last year, the United States Department of Health and Human Services allowed small businesses and other organizations to exceed the deductible limit on small-group health plans if such a move was necessary in order to ensure affordable premiums for their workers.
In fact, already 96 percent of “bronze” plans on the 2014 Small Business Health Options (SHOP) marketplace exceeded the previous deductible cap, according to health insurance information company HealthPocket.
While the move is surely embraced by small employers worried about Obamacare affordability, it may be feared by small-business employees. They were previously guaranteed that they and their families would not have to pay more than $4,000 in out-of-pocket healthcare deductibles through their employer’s insurance plan. Now those deductibles can continue to reach much higher—driving up their health care costs.
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