The answer to the question "What's up with the ACA?" can change from month to month. See Part I for my thoughts on the ACA earlier this year. Here are some insights into what is happening with the Affordable Care Act (ACA) right now.
A few months ago, the government paved the way for employers to offer health reimbursement arrangements (“HRAs”) that reimburse employees for their individual health insurance premiums. Such arrangements previously were prohibited for most active employees.
At this time, few employers are adopting Individual Coverage HRAs due to the significant legal limitations placed on the HRAs, and the fact that HRA vendors are still developing robust Individual Coverage HRA products. I described those legal limitations in this article. We anticipate interest in Individual Coverage HRAs may increase in 2020 and beyond.
Upon the January 1, 2019 repeal of the individual shared responsibility mandate penalty, the ACA was challenged yet again in court. This time, the argument is that the repeal of the individual shared responsibility mandate causes the entire ACA to be unconstitutional. A lower court agreed with the plaintiff that the enter ACA is unconstitutional; that decision was appealed and, in July, a federal appeals court heard arguments in the case. Regardless of the outcome of the case, an appeal to the Supreme Court seems likely.
We have not seen significant disenrollments of employees from employer-sponsored group health plans following the January 1, 2019 elimination of the individual shared responsibility mandate penalty. Whether or not the elimination of the penalty by itself results in significant disenrollments remains to be seen.
The employer “shared responsibility” mandate is still in effect, along with ACA reporting requirements. The IRS has been actively enforcing the mandate by sending out proposed penalty assessments to employers. For guidance on the ACA’s reporting requirements, sign up for our webinars on the topic. Access our archive of common reporting issues to make sure you’re in compliance with ACA reporting.
The affordability percentage, which determines whether individuals qualify for individual coverage premium subsidies and whether employers are subject to the Affordability Penalty under the employer shared responsibility mandate has decreased to 9.78% in 2020 from 9.86% in 2019. Employers that calibrate their health plans premiums to the affordability percentage may need to decrease the amount employees are required to pay for coverage in order to ensure their coverage is affordable.
For self-funded plans, the annual fees that plans must pay to fund the Patient Centered Outcomes Research Institute (PCORI) are coming to an end. If your company’s last plan year ended on or between October 1, 2018 and December 31, 2018, you should have already paid your last PCORI fee by July 31, 2019 — congratulations!
However, if your company’s plan year ends on or between January 1, 2019 and September 30, 2019, you have one more PCORI fee due by July 31, 2020 for the plan year ending between January 1, 2019 and September 30, 2019. If your plan is fully insured, your carrier pays these fees. If your plan is self-funded, your company typically must pay these fees.
Sarah provides employer-focused guidance on human resource matters. With an emphasis on employee benefits and the Affordable Care Act, she distils the complexity of employment laws into understandable action items that meet a client’s business goals.
Sarah provides employer-focused guidance on human resource matters. With an emphasis on employee benefits and the Affordable Care Act, she distils the complexity of employment laws into understandable action items that meet a client’s business goals. During previous private practice experience, Sarah handled numerous complex benefit matters, including the transition of benefit plans in large corporate acquisitions, de-risking solutions in pension plans, contested health plan claims, DOL and IRS audits and the implementation of ACA-compliant health plan solutions. Sarah graduated from University of Wisconsin Law School, with a Bachelor of Arts degree from Grinnell College.
Like Wrightstown Community School District Superintendent Carla Buboltz, many civic leaders — as well as business owners and executives — are seeing their job descriptions evolve. Healthcare reform, along with escalating health insurance costs, are demanding more of their attention than ever before. A survey by the U.S. Chamber of Commerce says the effects of the Affordable Care Act (ACA) are now the top concern for organizations, edging out general uncertainty about the U.S. economy.
When the public exchanges opened in October 2013, the technical glitches and low enrollment were well publicized. Since then, both public and private exchanges have evolved significantly. The private alternatives that have entered the scene often have more advantages than their public counterparts.
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