Congress Approves Bill To Keep Current Obamacare Small Business Definition Intact

Date: October 02, 2015

Measure Gives Businesses Breathing Room, Though States Can Still Alter Definition

In a move that will provide relief for small businesses across the US, Congress this week approved the Protecting Affordable Coverage for Employees Act, which had bipartisan support. The measure, first introduced in the House in March, passed in the House and was approved in the Senate by voice vote. Sponsors included Sens. Jeanne Shaheen (D-NH) and Tim Scott (R-SC), the AP reported. Currently, Obamacare defines small businesses as having up to 50 workers. That number was set to increase to 100 on Jan. 1, 2016. The AP reported that the bill approved Thursday “would keep the small business definition at 50 workers but let states increase the number if they choose.” The New York Times reported that in response to the measure, Shaheen said, “This bill will make a helpful adjustment to the Affordable Care Act for small and midsize businesses by limiting potential premium increases and letting states determine what’s best for their market.” In similar comments, Scott said the bill will mean that “small-business owners all across America are not more negatively impacted by Obamacare.” Meanwhile, Rep. Brett Guthrie (R-KY), the measure’s chief sponsor in the House, “said he had heard from many small-business owners who feared that their insurance arrangements would be disrupted by ‘the mandated expansion of the small-group market.’” The Times reported that the “swift passage” of the PACE Act “followed months of lobbying and advocacy” by groups including the National Federation of Independent Business.

What Happens Next

The New York Times reported that following the PACE Act’s passage in the Senate, “a White House spokeswoman confirmed that Mr. Obama would sign the bill.” This means that for now, the current definition of a small business will remain.

What This Means For Small Businesses

Passage of the PACE Act is an important, hard-won victory for the small business community. If the small-group provision had been implemented as planned on Jan. 1, 2016, small employers across the US with between 51 and 100 workers would have been faced with having to provide workers with health coverage or face steep tax penalties like those large firms face, but would have been defined and regulated like the smallest of employers. Many small businesses would have suffered under this costly Obamacare mandate. The battle against Obamacare is far from over, however, and small businesses continue to face cost burdens as healthcare mandates grow.

Additional Reading

National Journal and the Wall Street Journal are among the additional outlets covering the PACE Act’s passage.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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