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Topics of interest to both consumers and agents related to Covered California and the ACA biased in favor of the successful implementation of the Exchange and deliberately apolitical.

HHS Clarifies Minimum Contribution and Group Participation Requirements

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It seemed that the ACA was saying that insurance companies would be allowed to decline to offer coverage to small employers for failure to satisfy minimum contribution or group participation requirements under state law or the SHOP standards.

In a final rule published 3.27.13, the HHS clarified, saying: ” Upon further consideration of this issue, we have determined that small employers (less than 100 employees) cannot be denied guaranteed availability of coverage for failure to satisfy minimum participation or contribution requirements.”

The carriers will continue set minimum contribution or group participation requirements beyond 1.1.14., but HHS says, “…in the case of a small employer that fails 
to meet contribution or minimum participation requirements, an issuer may limit its offering of coverage to an annual open enrollment period, which we set forth in this final rule as the period beginning November 15 and extending through December 15 of each year.

Generally, the group market will have continuous open enrollment, except for small employers that fail to meet contribution or minimum participation requirements, for which the enrollment period may be limited to the annual enrollment period described above, from November 15 through December 15. This approach addresses concerns about adverse selection.


This is actually great news!!! Small groups that struggle to meet participation will be able to continue coverage without being at the risk of carriers canceling coverage for them. The annual open enrollment is not a big deal since this is how groups have operated for many years.

I ran across this interesting analysis by a LA based Economic Development Research firm. Good food for thought on the Affordable Care Act, Covered California and how they affect employers.


"If a group does not meet either minimum, the proposed rules would require carriers to accept these non-compliant groups during a special open enrollment period (Nov 15 thru Dec 15). Otherwise, all groups must meet the carrier minimum participation and contribution rules... just as they usually would."

My thought is that we will then see a lot of "management carveouts" written during that time, if the rank and file employees qualify for the exchange and waive out of small group. Or is this only in the exchange?

Starting 1.1.2016 small group will be defined to

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