What Employers Need to Know about the Repeal of Small Group Deductible Limits

Issued April 1, 2014

On April 1, 2014, President Obama signed into law Bill HR4302 - Protecting Access to Medicare Act of 2014, sometimes called the "Doc Fix" bill.

This bill includes a significant modification to the Affordable Care Act (ACA), ending limitations on deductibles that were set at $2,000 per individual and $4,000 per family on small group employer-sponsored health plans, with an effective date retroactive to the enactment of the ACA. Small group health plans are defined as health insurance plans with up to 50 or 100 participants, depending on the state.

There were no changes to the annual out-of-pocket maximum limits for small group employer-sponsored health plans, which remain $6,350 per individual and $12,700 per family.

This change in the law will allow small businesses to continue to offer affordable health plans along with flexible compensation options, such as Health Reimbursement Arrangements (HRAs), Health Savings Accounts (HSAs), and Flexible Spending Accounts (FSAs), all of which are available under the Paychex Benefit Account. The deductible change reduces the overall costs of health insurance, making these arrangements more attractive for small employers and their employees.

We anticipate that employers will see the potential impact of this change during their next open enrollment period. In the meantime, Paychex Insurance Agency will monitor any developments and continue to help you find the most effective benefit solutions in the complex world of health care reform.