Arkansas Panel Wants Definition of ‘Small Business’ Expanded

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A legislative panel has asked Arkansas’ insurance commissioner to expand the definition of small businesses so more companies can purchase coverage for their employees through a marketplace.

But state Insurance Commissioner Allen Kerr said he doesn’t have the power to make that revision, and it would require a change in state law.

The Arkansas Health Insurance Marketplace Legislative Oversight Committee voted to ask Kerr to change the definition to businesses with 100 or fewer employees. The state defines a small business as having between two and 50 employees.

The move would allow more businesses to participate in the Small Business Health Options Program, an online marketplace where small businesses can shop for plans for their employees. The state is preparing to launch its own SHOP, with enrollment beginning Nov. 1.

“You want to get as many people in as possible, so if you’re only able to market to employers with 50 employees or under, that’s set,” said Republican Sen. David Sanders, who co-chairs the oversight committee. “If you expand the definition and say up to 100 employees, then that opens the door for more people to participate in the SHOP.”

President Barack Obama on Oct. 7 signed into law a measure keeping the small business definition at 50 workers but allowing states increase the number if they choose. Kerr the following day said the state would continue following the definition of 50 or fewer employees.

Kerr said that definition is included in two places in state law, including the law setting up the insurance marketplace’s board.

“There is only one entity that can change the law of Arkansas, and that is the General Assembly when in session,” Kerr said in a statement released by his office.

Sanders said he’s researching to see whether that definition can be changed by regulation rather than state law. The Legislature is not set to meet again until April, though Gov. Asa Hutchinson has said a special session would likely be needed to look at the future of the state’s hybrid Medicaid expansion.