Small businesses get extension for ACA in Massachusetts

An extension made by the federal government will give small businesses in Massachusetts an extra year to comply with the rating factors that determine health insurance premiums under the Affordable Care Act.

Granted Thursday by United States Department Health and Human Services Secretary Kathleen Sebelius, the extension will allow the state to transition to full compliance with ACA by 2017, a one-year addition to the original three-year transition period the state had received in 2013.

Randall Ellis, a professor of economics at Boston University, said the extra year would enable businesses to operate and better inform the public about healthcare options.

“It’s a mixed blessing,” he said. “Right now they’re working at trying to make it easier for people to enroll and make it better understood. There’s been a lot of negative publicity about ACA, and the successes still haven’t come out.”

Massachusetts Gov. Deval Patrick thanked the Obama Administration for allowing the Commonwealth such flexibility that will help small businesses transition into compliance smoothly.

“The Commonwealth remains a national leader in health care coverage for our residents, and we will continue working closely with our partners at the federal level to ensure the ACA is successfully implemented,” he said in a Friday release.

The rating factors used to determine insurance premiums for these small businesses will also be changing. Current rating factors, such as the industry, group size, participation rate and use of membership for businesses will not be allowed under ACA, while factors such as age, geography, family size and tobacco usage status will continue to be accepted, the release stated.

“The extended transition is good for our market,” said Commissioner of Insurance Joseph G. Murphy in the release. “The additional year will benefit our small employers and give them extra time to ensure that they are making the best insurance choices for their workers.”

The Center for Medicare and Medicaid Services, a department within HHS, will continue to work with Massachusetts to implement health care law in a way that works best for the Commonwealth, said spokeswoman Alicia Hartinger in a statementFriday.

“The health reform law specifically recognized the special circumstances for a state that had already expanded coverage and reduced their uninsured rate,” she said. “To accommodate and align Massachusetts’s transition period with the recently announced HHS transitional policy for consumers, we are providing an additional year for Massachusetts to transition to the new standards.”

Ellis said some people are concerned that offering health insurance and premiums could hurt small businesses financially or put them out of business altogether.

“It is false to think that lots of businesses will go out of business,” he said. “It does mean that more workers compensation will tend to come in the form of health insurance rather than just a salary or wages.”

Several residents said they have mixed views about the additional year to meet requirements under the ACA.

Michael Myers, 35, of Brighton, said the one-year extension would not be useful for all small businesses in the Commonwealth.

“It’ll help [because] there needs to be enough information for people to make informed choices, [but] full compliance is already two years out and people are already preparing to be ready by then,” he said.

Claudia Cardoso, 27, of Dorchester, said she is skeptical about what the extension could mean for the future and success of ACA.

“It’s an excuse or a way of delaying stuff so that there’s more time to wrap things up,” she said. “I don’t trust it, and it forms different expectations of how things are going to be.”

Grant Johannes, 21, of Brighton, said he would rather insurers take the necessary time to transition to full compliance with ACA than push for an unrealistic deadline.

“It’s been a pain with the software and website being down,” he said. “[The new ratings] let companies better gauge how much of a risk you are. It makes sense coming from a business standpoint.”

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