The Department of Labor on Thursday (1/4/2018) released proposed new rules that its backers, including President Trump, say will make it easier for small businesses and sole proprietors to band together in Association Health Plans (AHP) to purchase health insurance. If approved, these rules, a follow-up to an executive order from President Trump issued last October, will allow new forms of associations to be created that supporters say will make healthcare insurance more accessible for small businesses and sole proprietors, likely starting in 2019. The proposal — which now faces a 60-day comment period — broadens the definition of those eligible to join or form such groups. Supporters say that AHPs are similar to large group plans available to major corporations. Association Health Plans have long been supported by organizations like the National Restaurant Association, National Retail Federation and NFIB. They have been opposed by traditional types of insurance companies including state-based Blue Cross associations and members of the insurance trade group AHIP.

AHP supporters say they will make insurance more affordable and available to small businesses and the self-employed. Here are some reasons why.

The plans will use the same type of purchasing leverage as corporate “large-group plans” | Even before Obamacare (also called the ACA or Affordable Care Act), large employers were able to “self-insure” and thus be exempt from certain state-by-state mandated benefits related to hospitalization, prescription drugs and emergency care. Association Health Plans, because they will be treated as “large group plans,” would also be able to benefit from the same purchasing power and flexibility in coverage of self-insured options. Also, large group plans typically purchase catastrophic coverage at prices not available to small groups or individuals.

Prior conditions | The plans could not reject employers based on the health status of their workers.

Individual pricing | Individual employees in a workplace could not be charged different amounts based on their health.

State authority still applies | States historically have had oversight responsibility for insurance coverage sold in their state. In the rule, no matter how plans are funded, states would still retain oversight of their solvency in the way they regulate self-insured large businesses that operate in their state.

Here are some reasons its critics give for opposing AHPs.

Critics say the rules could expose consumers to coverage gaps or higher out-of-pocket costs and would not have to meet some ACA rules

Plans would not have to include all ACA requirements | According to opponents, associations would not have to include benefits across 10 broad “essential” categories of care, including hospitalization, prescription drugs, and emergency care. However, as noted above, large group plans do not have to include these under Obamacare.

Overhead mandate exemption | Opponents argue associations would be exempt from an ACA rule requiring insurers to spend at least 80 percent of premium revenue on medical care.

State authority | Association plans would be able to offer plans across state lines. For this reason, states and state-based insurance groups like Blue Cross / Blue Shield have historically opposed Association Health Plans.

Cherry picking the young and healthy away from individual insurance pools | In a statement, the industry advocacy group AHIP says that allowing AHPs could pull the young and healthy away from the broader individual insurance pool. That could, in turn, raise the cost of insurance for those insured through the federal marketplace, for example.

Overview: Key elements of the rule

Purpose of the rule from the Department of Labor | A follow-up to an October executive order from the Trump Whitehouse that small business trade groups say will enable small businesses and sole proprietors to access affordable healthcare coverage by forming large group associations.

If approved, the rules will allow associations to be formed for the purpose of offering insurance and enrolling members from the same industry or region | “A plan could serve employers in a state, city, county, or a multi-state metro area, or it could serve all the businesses in a particular industry nationwide,” said the Department of Labor’s press release on the proposed rule.

Many small business advocacy organizations have pushed for AHPs for years | Organizations like NFIB, the National Restaurant Association, and the National Retail Federation have long supported Association Health Plans. Insurance trade groups, including Bluecross associations, oppose it.

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Today, the House of Representatives passed (217 to 213) legislation to revise the Affordable Care Act (ACA), known also as Obamacare. As we have often reported, businesses with less than 50 employees are not subject to the provisions of the ACA. However, as individuals, business owners and employees are required to follow it.

If it becomes law, what would the legislation approved by the House mean for small businesses?

The legislation stops short of eliminating the 2010 health-care law. However, if passed in its current form, it would make a significant dent in large portions of the current law, including:

• States, rather than the federal government, would have the power to set important health insurance rules.
• It would end the ACA’s subsidies for most people who buy health plans through marketplaces created under the law.
• It would rescind several taxes that have helped pay for Obamacare, including ones imposed on Americans with high incomes, health insurers, medical devices and tanning salons.

What’s next?

The legislation must now go to the Senate where it will face a new round of challenges. For example, the last-minute wrangling to get a bill approved by the House meant the vote took place before being “scored” by the nonpartisan Congressional Budget Office (CBO) — Congress’s official scorekeeper — on how much the bill would cost and how many people would receive health-care coverage.

The Senate cannot review the legislation and determine the rules of debate until the CBO submits its official estimate. That scoring could set off more rounds of intra-party debates among Republicans. For example, GOP senators from states that have expanded Medicaid under the ACA have voiced concerns about rollbacks to that program included in the House bill.

See also on SmallBusiness.com

How the American Health Care Act (AHCA) Could Impact the Self-Employed

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One in Five Marketplace Consumers in 2014 was a Small Business Owner or Self-Employed

According to a study by the Department of Human Sources released earlier this week, independent workers (also called one-person businesses, sole proprietors, etc.) represent one-in-five of all ACA Marketplace consumers. In other works, independent workers are almost three times more likely to rely on Marketplace coverage than other workers.

1.4 million | Self-employed small business owners who were Marketplace consumers
10% | Percentage of “on-demand economy” workers got coverage through the Marketplace (2014)

Among small business owners and other independent workers, those with annual incomes below $65,000 were the most likely to rely on the Marketplace for health insurance. Middle- and lower-income Americans who buy coverage through the Marketplace are eligible for tax credits to help keep coverage affordable. About 65 percent of small business owners and 69 percent of all self-employed or independent workers have incomes below $65,000.

The 10 states with the highest percentage of small business owners relying on the Marketplace for coverage were Vermont, Idaho, Florida, Montana, Maine, California, New Hampshire, Washington, D.C., Rhode Island, and North Carolina.

The 10 states with the largest number of small business owners with Marketplace coverage were California, Florida, Texas, New York, Georgia, North Carolina, Pennsylvania, Michigan, Washington, and Virginia.

How long will it take for Obamacare to be replaced?

Despite the non-stop punditry by cable TV news “analysts,” no one really knows what the future holds for the repeal and replacement of the Affordable Care Act. There are provisions in Obamacare that have near universal appeal (coverage for prior conditions, for example). And despite the laws and executive directives that will sound as if Obamacare has ended immediately, it will take months, perhaps years, for a new plan–or no plan–to be enacted.

Bottomline | It is doubtful that what is now Obamacare will last. It is equally doubtful that a return to no-care will happen either.

As we’ve noted many times before, the Affordable Care Act (ACA) does NOT require small businesses with fewer than 50 employees to provide healthcare insurance. However, you do have to make employees aware that they (and you) can purchase insurance through a health insurance marketplace. One of the complaints about the consumer insurance offered through such marketplaces is the confusing variations in coverage.

The NYTimes.com today (Oct. 18, 2016) is reporting that when ACA insurance marketplaces start open enrollment in two weeks (Nov. 1, 2016-Jan. 1, 2017), many consumers (including small business owners) will have a new option: standardized health plans that cover basic services without a deductible.

Quote via NYTimes.com

With many health plans on the marketplace coming with deductibles in the thousands of dollars, consumers have complained that they were getting little benefit beyond coverage for catastrophic problems. The new standardized options are meant to address that concern — to ensure that “enrollees receive some upfront value for their premium dollars,” as the Obama administration said.

The new plans could still be costly. While the federal government specifies deductibles, co-payments and other out-of-pocket costs for the standardized options, it does not limit premiums, which in most cases are still regulated by state insurance commissioners. The administration has said it does not expect the standardized options to have a significant effect on premiums in 2017.

“This is one more tool that will make it easier for consumers to select the right plan,” said Marjorie K. Connolly, a spokeswoman for the Department of Health and Human Services, told the Times.

(More information on NYTimes.com.)

Also on SmallBusiness.com

Answers to Health Insurance Questions if Your Business Has Less than 50 Employees

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No matter how many times it is repeated, there are many people who don’t realize that small businesses with fewer than 50 employees (or the “full-time equivalency” of 50 employees) are NOT required to purchase health insurance coverage for their employees. However, if you DO choose to provide insurance to employees, you can purchase it through a local insurance agent or there is a marketplace in which to purchase coverage. Such marketplaces can are run by either states or the federal government and are called the SHOP marketplace. (Individuals do not have access to SHOP marketplaces, only small group organizations.) Here are some frequently asked questions about SHOP marketplaces. Below the FAQ, you can find a glossary of terms found on the website Healthcare.Gov.

Do I have to provide my employees with health coverage if I have fewer than 50 employees? No!

You do not have 50 or more full-time equivalent (FTE) employees, you do not have to provide health insurance. However, you can choose to offer insurance through the SHOP Marketplace in your state or through any other source. But you don’t have to, and you don’t face a penalty if you don’t.

If you have 50 or more employees, you may have to offer health coverage meeting certain standards or make a payment. Learn about the Employer Shared Responsibility Payment.

What if I’m self-employed?

If you’re self-employed with no employees, here are your options:

You can enroll in coverage through the Health Insurance Marketplace for Individuals & Families.

You cannot enroll in a SHOP plan.

Learn more about how self-employment is defined. If you have at least one full-time employee other than yourself, a spouse, a family member, or another owner, you can enroll in a SHOP plan.

How do I make payments for my SHOP plan?

You make your premium payments to the SHOP Marketplace, not your insurance company.

Learn more about paying your SHOP premiums (PDF).

Where can I get a list of agents and brokers in my area?

• After you create a SHOP Marketplace account, log in and you’ll see a list of agents and brokers searchable by ZIP code. All of them have signed privacy and security agreements with the SHOP Marketplace that allow them to sell SHOP plans.
• See how to create a SHOP Marketplace account and log in.
• You can work with any agent or broker who’s signed the SHOP agreement. Ask any agent or broker you want to work with if they’ve signed it.

Healthcare.Gov Glossary

Are you confused by any of the terms mentioned in the questions or answers above? Click on any of these terms and you can find out what they mean. (Note: These links leave SmallBusiness.com and will take you to the Healthcare.gov website.)

Note: The legislation discussed in the following report involves no change in the existing provision in the Affordable Care Act (Obamacare) that exempts employers with 49 or fewer employees from having to provide health insurance coverage to employees. It is about legislation called “the PACE bill” that changes a provision in the ACA related to employers of 51 to 100 employees.

President Obama yesterday (Oct. 8, 2015) signed into law a bill passed by the Senate and House last week that will reverse a provision in the Affordable Care Act (Obamacare). Without the new law, companies with 51 to 100 employees would have been forced to participate in “small group markets” for health insurance next year rather than “large group plans” as they have in the past.

Background

The ACA had mandated that effective January 1, 2016, the definition of a small group employer would change from its current size (one to 50 employees) to one to 100 employees. Without passage of the new law, businesses with 51 to 100 employees would have been forced to participate in the ACA’s Small Business Health Options Program (SHOP) where they would face new coverage requirements, likely pay higher premiums, and could lose their current plans.

The new bill, the Protecting Affordable Coverage for Employees (PACE) Act will maintain the current definition of a small group market as one to 50 employees but give individual states the flexibility to expand the group size if they feel the market conditions in their state necessitate the change.

(While extremely rare, this isn’t the first Obamacare revision to pass Congress. In 2011, lawmakers voted to eliminate extra paperwork that businesses were going to have to file with the IRS.)

Small Group vs. Large Group Markets

“Small employers are treated very differently under the ACA than large employers for purposes of insurance regulation,” Timothy Jost, a professor at the Washington and Lee University School of Law in Lexington, Va., told the Society of Human Resources Management.

For example, small group market plans must:

• Cover 10 essential health benefits.
• Fit into the actuarial value levels (platinum, gold, silver and bronze) defined by the ACA.
• Participate in the risk adjustment program and be part of a single risk pool for setting premiums.
• Only consider age, geographic location, family composition and tobacco use in setting rates.
• Large group plans are not bound by any of these requirements.

The Congressional Budget Office estimated that the PACE Act will reduce the deficit by $400 million over 10 years because it would reduce premiums in the midsize employer market, thus increasing taxable income of employees.

Potential impact on businesses with less than 50 employees?

Businesses that have fewer than 50 employees are not required to provide healthcare insurance under the ACA.

However, those that do provide insurance may see increases in their rates without the addition of the risk pool found in companies with 50–100 employees.

Advocates of requiring the 50–100 employee companies to shift to the small group market argued the move would make insurance for smaller companies more affordable and would stabilize the ACA’s SHOP marketplace by bringing in more participants.

]]> https://smallbusiness.com/taxes/small-business-healthcare-tax-information/ Thu, 02 Apr 2015 01:42:47 +0000 http://smallbusiness.com/?p=13936 While businesses with less than 50 employees are not required to provide employees healthcare insurance, many do. If you are one of those companies, then you must adhere to the guidelines of the Affordable Care Act (ACA). If you don’t provide healthcare insurance through a group plan, you are required to purchase healthcare coverage for yourself or pay a penalty (tax) as part of your annual federal taxes.

The IRS provides a wide range of resources related to the ACA. Here are links to many of them:

Find Out More About Health Coverage Exemptions Based on Income
Health Care Tax Tip 2015-23, April 3, 2015

ACA resources for individuals and families available on IRS.gov/aca
Health Care Tax Tip 2015-22, April 2, 2015

Determine if You Can Benefit from the Premium Tax Credit
Health Care Tax Tip 2015-21, March 26, 2015

The Premium Tax Credit – The Basics
Health Care Tax Tip 2015-20, March 25, 2015

The Individual Shared Responsibility Provision – The Basics
Health Care Tax Tip 2015-19, March 20, 2015

What Kind of Health Insurance Qualifies as Minimum Essential Coverage?
Health Care Tax Tip 2015-18, March 19, 2015

Affordable Care Act Consumer Alert: Choose Your Tax Preparer Wisely
Health Care Tax Tip 2015-17, March 13, 2015

How You Can Benefit from the Premium Tax Credit
Health Care Tax Tip 2015-16, March 10, 2015

Calculating an Individual Shared Responsibility Payment
Health Care Tax Tip 2015-15, March 6, 2015

The Health Care Law and Taxes: Reporting Coverage, Exemptions and Payments
Health Care Tax Tip 2015-14, March 5, 2015

Changes to Small Business Health Care Tax Credit
Health Care Tax Tip 2015-13, February 26, 2015

Health Care Law Affects 2014 Tax Returns – Tax Help Available
Health Care Tax Tip 2015-12, February 19, 2015

Maintaining Health Insurance Coverage Documentation for the Tax Filing Season
Health Care Tax Tip 2015-11, February 17, 2015

Get to Know the Health Insurance Marketplace
Health Care Tax Tip 2015-10, February 13, 2015

Obtaining and Claiming a Health Coverage Exemption
Health Care Tax Tip 2015-09, February 12, 2015

Important Information about Advance Payments of the Premium Tax Credit and Your Tax Return
Health Care Tax Tip 2015,-08, February 5, 2015

Taxpayers Will Use New Information Statement to claim Premium Tax Credit
Health Care Tax Tip, 2015-07, February 4, 2015

The Health Care Law’s Effect on You
Health Care Tax Tip 2015-06, January 29, 2015

The Health Care Law’s Effect on Your Tax Return
Health Care Tax Tip 2015-05, January 27, 2015

The Individual Shared Responsibility Provision brings changes to 2014 Income Tax Returns
Health Care Tax Tip 2015-04, January 23, 2015

Premium Tax Credit Brings Changes to Your 2014 Income Tax Returns
Health Care Tax Tip 2015-03, January 22, 2015

The Health Care Law – Getting Ready to File Your Tax Return
Health Care Tax Tip 2015-02, January 21, 2015

Health Care Law Brings Changes to IRS Tax Forms
Health Care Tax Tip 2015-01, January 13, 2015

New IRS Publication helps you understand the Health Care Law
Health Care Tax Tip 2014-23, Dec. 23, 2014

It’s Not Too Late to Report Changes in Circumstances that May Affect Your Premium Tax Credit
Health Care Tax Tip 2014-22, Oct. 31, 2014

Information for Employers about Their Responsibilities Under the Affordable Care Act
Health Care Tax Tip 2014-21, Oct. 16, 2014

Small Employers Should Check Out the Health Care Tax Credit
Health Care Tax Tip 2014-20, Oct. 8, 2014

New IRS Publication Helps You Find out if You Qualify for a Health Coverage Exemption
Health Care Tax Tip 2014-19, Sept. 23, 2014

The Individual Shared Responsibility Payment
Health Care Tax Tip 2014-18, Sept. 16, 2014

Moving Can Affect Your Premium Tax Credit
Health Care Tax Tip 2014-17, Sept. 12, 2014

Getting Married Can Affect Your Premium Tax Credit
Health Care Tax Tip 2014-16, Aug. 26, 2014

IRS: Now is the Time for a Mid-Year Premium Tax Credit Checkup
Health Care Tax Tip 2014-15, Jul. 18, 2014

IRS.gov has information about the health care law and its effect on your taxes
Health Care Tax Tip 2014-14, Jul. 16, 2014

Find out if You Qualify for a Health Insurance Coverage Exemption
Health Care Tax Tip 2014-13, Apr. 17, 2014

Find Out if Your Health Insurance Coverage is Considered Minimum Essential Coverage Under the Affordable Care Act
Health Care Tax Tip 2014-12, April 10, 2014

Time May be Running Out — March 31 is an Important Deadline
Health Care Tax Tip 2014-11, March 25, 2014

What do I need to know about the Health Care Law for my 2013 Tax Return?
Health Care Tax Tip 2014-10, March 18, 2014

What You Need to Know about the Amount of Health Insurance Reported on Form W-2
Health Care Tax Tip 2014-09, March 13, 2014

Small Business Health Care Tax Credit
Health Care Tax Tip 2014-08, March 10, 2014

Changes in Circumstances can Affect your Premium Tax Credit
Health Care Tax Tip 2014-07, March 25, 2014

Four Tax Facts about the Health Care Law for Individuals
Health Care Tax Tip 2014-06, March 11, 2014

Three Timely Tips about Taxes and the Health Care Law
Health Care Tax Tip 2014-05, March 6, 2014

The Individual Shared Responsibility Payment – An Overview
Health Care Tax Tip 2014-04, March 20, 2014
pub/irs-pdf/p5201.pdf
The Premium Tax Credit (PDF)
Health Care Tax Tip 2014-03, February 25, 2014

The Health Insurance Marketplace – Learn about Your Health Insurance Coverage Options
Health Care Tax Tip 2014-02, February 25, 2014

IRS Reminds Individuals of Health Care Choices for 2014
Health Care Tax Tip 2014-01, February 25, 2014

“It used to be with a typical self-funded plan you wouldn’t even get the re-insurers to give you a competitive rate until you had 100 people,” said Howard Soltoff, an insurance consultant for Bethesda-based Tribridge Partners. “But now, if you have 10 employees, you can get a self-funded plan.”

That doesn’t mean businesses should necessarily opt for such coverage. Smaller businesses tend to have more to lose than larger ones in self-insuring. With only a few dozen employees paying into the risk pool, a sudden large unexpected expense, such as an employee having a premature birth or a sudden need for an organ transplant, could prove costly if managers have not planned ahead.

To provide some cushion, most self-insurers purchase what’s known as stop-loss insurance to cover them in the case of a single sky-high cost. But the business is still liable for large claims falling below whatever threshold is set, which can be upwards of $300,000 for some companies.

“You could have one claim that kills you, if something catastrophic happens,” said Janice Algie, human resources director at the Fairfax-based Peterson Cos., a real estate company.

Read the entire story at WashingtonPost.com: “Self-insurance could be small business option”

The related issues are (1) the ACA’s definition of a “fulltime employee” as anyone working 30 hours or more per week; and (2) the 50-employee metric used by the ACA to determine whether or not a company must comply with provisions of the law.

While policy analysts and economists can debate whatever they want to believe will happen because of those provisions, one thing is certain: In the life of a growing small business, the owner(s) will reach a point where they will realize the next employee they hire will be the most expensive hire they will ever make, the one that will add significant overhead to their business in the form of benefits, penalties (taxes) and administrative costs.

And it is fairly clear what happens when you create such a trip-wire for growth: employers will seek a legal means to avoid it.

Growing companies find alternatives to hiring employees in order to avoid costs, including mandated benefits

“Not hiring employees” is a practice so baked into American business management theory that it has not only revolutionized the American way of work and life, it has revolutionized the way of work and life of other countries around the globe. Out-sourcing is another way of saying “not hiring employees.” Another term for “not hiring employees” is “independent contractor” or “permatemps.”

Companies like Nike and Apple “don’t employ” more people than they employ to provide us the products carrying their logo. And a significant portion of the cost of employees is wrapped up in benefits.

Many types of small businesses exist today because of the desire by large companies to outsource.

France’s 49-Employee Business

A dramatic example of how mandated benefits are a disincentive to hiring is the phenomenon in France some call “The 49-employee Business.” In France, when a company hires its 50th employee, the accomplishment is accompanied by a long list of regulations, rules and mandated policies and expenses including the establishment of multiple worker councils, setting up a profit-sharing program and restrictions to the company’s ability to layioff employees — all bundled up in something called the French “labor code.”

While economists can argue that the benefits of scale will drive down a company’s costs (the theory is that growth in number of employees correlates to improvements in productivity and therefore economies of scale are gained, despite the associated costs of adding employees), such theories don’t seem to matter to a significant number of French entrepreneurs: According to a 2012 study by the London School of Economics, there are 2.4 times as many companies in France with 49 employees as there are with with 50.

Rather than grow past 49 employees, many French business owners skirt the 50+ labor code by creating new companies rather than expanding existing ones. “I can’t tell you how many times when I was Minister I’d meet an entrepreneur who would tell me about his companies,” Thierry Breton, former French Minister of Finance, said at a 2012 conference. “I’d ask, ‘Why companies?’ He’d say, ‘Oh, I have several so that I can keep [the workforce] under 50.'”

Potential actions U.S. small businesses will take to legally avoid being subject to the Affordable Care Act

The French “49-employee business” demonstrates why you should never under estimate the savvy of entrepreneurs (which, is a French word, no?) to find a way to disrupt a system they believe needs disrupting. Like in the “contractor vs. employee” battle, the legality of creating multiple businesses to avoid the ACA sounds like something that could keep tax and employment attorneys employed for years.

The 29.5 hour work week

Similarly, if a law defines “full time employees” as an individualwho works 30 hours per week and you make it obvious that the difference between 29 hours and 30 hours is several thousand dollars, you create a trip-wire to hiring at 29.5 hours. As the impact of the ACA has not been fully absorbed, it is too early to determine if there is a new class of worker emerging called “the 29.5 hour employee.” However, the phenomenon of “permatemps” suggest there will be such less-than-full-time employee designation soon.

We’ll have to leave that theory to another day as the French have only lowered their definition of full-time employees to 35 hours.

(via: NYTimes.com You’re the Boss blog) (Based on reporting and anecdotal evidence), rate increases facing most employees insured through a small business* will be considerably lower than the dire predictions. By and large, it appears that the increases will be less than 10 percent. In some cases, they will be near zero — and at least one state is claiming the average rate increase will actually be a rate reduction.

Quote:

If you asked someone in the health insurance industry earlier this year — the executives at the insurance carriers or the brokers and agents who sell their policies — the word on premiums was grim. In March, an unidentified insurance industry executive told The Hill that “everybody knows” that the way the exchange has rolled out “is going to lead to higher costs.” Then in April, a survey of insurance brokers by Morgan Stanley found that insurance premiums for small businesses were rising, on average, 11 percent, and at least 20 percent in 15 states. In Washington state, according to the report, small group rates were rising at the astounding rate of 588 percent.

Now it is October, and many states are finalizing rates in the small-group market for next year. And we are learning, anecdotally, that the rate increases facing most employees insured through a small business will be considerably lower than the dire predictions. By and large, it appears that the increases will be less than 10 percent. In some cases, they will be near zero — and at least one state is claiming the average rate increase will actually be a rate reduction.

Examples of states that have agencies providing some guidance on the rates they estimate:

Montana: An unweighted average** increase of 1.1 percent.

New York: A weighted average increase of 6.7 percent. The range of change runs from a 14.6 percent decrease to a 14.4 percent increase.

Rhode Island: A weighted average increase of 6.3 percent.

Vermont: The state’s dominant small-group insurer will go up by 7.7%.

Oregon: The state insurance division announced that rates for compliant small-group plans will fall by 5.8 percent in 2015.

Continue reading: “How Fast are Small-Business Insurance Premiums Rising? (

*Small businesses with fewer that 50 employees are exempt from the requirements, provisions and penalties of the Affordable Care Act (i.e., they don’t have to provide employees health insurance coverage). That said, the federal Agency for Healthcare Research and Quality estimates that 36% of small businesses with less than 50 employees do provide such coverage. Those small businesses which do provide coverage are subject to the provisions of the ACA, and so, therefore, when you read about small business premiums going up, the reference is to small businesses that (1) Have more than 49 employees or (2) Have chosen to provide healthcare insurance as an employee benefit voluntarily. If the have chosen this option, those companies are subject to (and benefit from) the provisions and requirements of the ACA.

**Unweighted averages take the amount of the percentage increase/decrease of all carriers and average them, ignoring the market share of each carrier.

Example:

Insurance Company A covers 90% of the market and is increasing its rates by 3%.
Insurance Company B covers 10% of the market and is increasing its rates by 15%.

Unweighted average rate increase: 9% (3+15)/2=9
Weighted average increase: 4.2% (.9×3)+(.1×15)=4.2