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ACA Update - What to Keep in Mind for 2016 / 03.08.2016

With the approaching deadline for the 1094/1095 reporting:

  • March 31st for issuing the forms to employees and
  • May 31st for paper or June 30th for electronic notification to the IRS,

we want to remind our clients of the other ACA topics to keep in mind for 2016.

NGF HDHP Maximum Out-of-Pocket (MOOP)

Non-grandfathered high deductible health plans (NGF HDHPs) are required to comply with ACA cost-sharing limits beginning in 2016. Consequently, a NGF HDHP that has a family deductible or MOOP limit higher than the permitted ACA individual OOP maximum ($6,850 in 2016) must apply an individual MOOP limit for each person enrolled in family coverage. This is referred to as an "embedded" individual MOOP maximum.

For example, if a plan has a family deductible of $10,000, the most one person may be required to meet before the plan pays 100% is $6,850.

Although NGF HDHPs are required to comply with ACA cost-sharing limits for individual family members, the family MOOP limit set by the IRS for HDHPs still apply ($13,100 in 2016).

Just released! The 2017 maximum annual limitation on cost sharing is $7,150 for individual coverage and $14,300 for family coverage.

Summary of Benefits and Coverage (SBC)

If any material change is made to a plan during the plan year that is not reflected in the most recent SBC, a notice must be provided at least 60 days before the effective date of the change.

A material change is any change that would be considered by an average participant to be an important enhancement or reduction in benefits. Changes made at annual renewal do not require 60-day advance notice.

Preventive Care

Beginning in 2016, non-grandfathered plans must cover, without cost-sharing, at least one type of each of the methods of contraceptives recognized by the FDA (if not already doing so):

  • Surgical Sterilization for women
  • IUD – Copper
  • Oral Contraceptives – Combined
  • Patch
  • Sponge with Spermicide
  • Spermicide Alone
  • Implant Sterilization for women
  • IUD – Progestin
  • Oral Contraceptives – Progestin only
  • Vaginal Ring
  • Cervical Cap with Spermicide
  • Emergency Contraception – Progestin
  • Implantable Rod
  • Injection
  • Oral Contraceptives – Extended, Continuous use
  • Diaphragm with Spermicide
  • Female Condom
  • Emergency Contraception – Ulipristal Acetate

Click here for FAQS about ACA coverage of preventive services.

Click here for information regarding the exemption for religious employers and accommodations for non-profit religious organizations.

Wellness Rules for GINA

The Equal Employment Opportunity Commission ("EEOC" or "Commission") is issuing a proposed rule that would amend the regulations implementing Title II of the Genetic Information Nondiscrimination Act of 2008 (GINA) as they relate to employer wellness programs. The proposed regulations address the extent to which an employer may offer an employee incentives for medical information about the employee's spouse who is also a participant in the employer's health plan. Under the proposed wellness exception, limited incentives may be offered to an employee whose spouse provides information about his or her current or past health status as part of a health risk assessment administered in connection with the employer's offer of health services as part of an employer-sponsored wellness program.

Read the full Genetic Information Nondiscrimination Act of 2008 here: https://www.federalregister.gov/articles/2015/10/30/2015-27734/genetic-information-nondiscrimination-act-of-2008

Health Reimbursement Accounts (HRA)

HRAs cannot reimburse expenses incurred by persons NOT enrolled in the integrated health plan.

Repeal of Automatic Enrollment

The requirement that employers with more than 200 full-time employees must automatically enroll new full-time employees onto one of its plans has been REPEALED.

Cadillac Tax

The tax designed for high cost health plans which was to take effect in 2018 has been pushed back to 2020; however, plans still need to consider this tax and their benefit designs.

Pay or Play

Two provisions of the Affordable Care Act that apply only to Applicable Large Employers (ALEs) are now in effect:

  1. the employer shared responsibility provision and
  2. the employer information reporting provision for offers of minimum essential coverage.

Employers must determine ALE status each calendar year based on the average size of their workforce during the prior year. If there were at least 50 full-time employees, including full-time equivalent employees, on average last year, the employer is most likely an ALE for the current year.

The penalties for 2016 are as follows:

  • $2,160 for the A penalty and
  • $3,240 for the B penalty.

Beware of reducing hours to afford penalties. Reducing Employees' Hours Could Lead to Discrimination Claims Under ERISA. Article by Michael "Todd" Mobley and Marc D. Katz, 2/19/2016, Andrews Kurth LLP, The National Law Review. Case: Marin v. Dave & Buster's, Inc., S.D.N.Y. 1:15-cv-36081.

Employee Premium Tax Credits – Section 1411 Certification for Employers

Starting in 2016, the government (specifically the Department of Health and Human Services (HHS)) will be issuing "Section 1411 Certifications" to employers regarding employees who purchased health coverage through a Marketplace (Exchange) AND qualified for a health insurance subsidy in 2015. These Certifications are meant to inform an Applicable Large Employer (ALE) of their potential liability of a shared responsibility ("Pay or Play") penalty and provides the ALE an opportunity to respond or appeal the subsidy determination and possibly triggering a "Pay or Play" penalty.

Section 1411 Certification requirements include:

  • Identification of the employee;
  • Provide that the employee has been determined to be eligible for advance payments of a health insurance subsidy;
  • Indicate that, if the employer has 50 or more full-time employees, the employer may be liable for a penalty under Code Section 4980H; and,
  • Describe the employer’s appeal rights.