4 Changes to the Affordable Care Act

The Affordable Care Act (ACA) is seeing a handful of changes this year. Some areas, like the automatic enrollment policy, were simplified for employers. Other line items will be tied to increased penalties. The good news is that there are fewer changes compared to previous years, so it’s easier to keep up with these shifts. Here are the top four to remember.

The Affordable Care Act (ACA) is seeing a handful of changes this year. Some areas, like the automatic enrollment policy, were simplified for employers. Other line items will be tied to increased penalties. The good news is that there are fewer changes compared to previous years, so it’s easier to keep up with these shifts. Here are the top four to remember.

ACA Change #1: The Employer Mandate is Official

Various leniencies that were available in 2015 during the initial transition phase will no longer be available:

  • Applicable large employers (“ALEs”) with between 50 and 100 qualifying employees will be fully subject to the ACA’s employer mandate rules and penalties if they do not meet the minimum health care coverage requirements for their employees.
  • Appropriate phrasing of job descriptions
  • 95% of full-time employees at a company must be offered essential health care coverage to avoid certain employer mandate penalties. In 2015, the threshold was 70%.

ACA Change #2: Repeal of Automatic Enrollment

The Affordable Care Act initially had an automatic enrollment provision where employers who are subject to the FLSA and employ more than 200 full-time employees were required to enroll automatically new full-time employees in one of the employer’s health benefits. This originally required employers to track and document any employee opt-out signatures.

On November 2, 2015, President Barack Obama signed the “Bipartisan Budget Act of 2015” that repealed the auto-enrollment requirement. For many employers, this may be one less thing to worry about on the compliance side of things. However, businesses can continue to document enrollment and opt-out signatures from their workforce if they want to.

ACA Change #3: Increased Information Reporting Penalties

There are increased penalties for filing incorrect or late tax returns. Filing incorrect returns are now $250, and the fee for intentionally disregarding to file altogether is $500. You will see reduced fees if you refile corrected returns within 30 days or by August 1st.

ACA Change #4: Embedded Self-Only Out-of-Pocket (“OOP”) Limits

In 2016, non-grandfathered health plans must apply an embedded self-only out-of-pocket (OOP) maximum to each individual enrolled in family coverage if the plan’s family OOP maximum exceeds the ACA’s OOP limit for self-only coverage ($6,850 for 2016). This applies to self-funded and large-group plans as well.

According to Kevin Counihan, CEO of the health insurance marketplace at the Department of Health and Human Services, the embedded limit is designed to “prevent consumers from being penalized for purchasing family coverage rather than self-only coverage.” This significant change affects many employer-sponsored, high-deductible health plans that commonly impose a single overall family OOP limit on family coverage without an underlying self-only OOP maximum for each covered family member.

Still unsure what this all means? Staffscapes is your human resource solution center. As Denver’s leading PEO for small businesses, we stay up to date on the latest changes to the Affordable Care Act. Contact us to discuss your HR needs.

Written By: Jim Thibodeau