“To improve is to change; to be perfect is to change often” – Winston Churchill
The ACA is hardly perfect, but it is trying to improve. Next year will mark an array of changes to ACA compliance. Whether you think theses changes will improve the ACA or not your company must remain compliant with each one.
Here are 11 changes coming to the ACA, you need to know for 2017.
1. Transition Relief
Transition relief for the Employer Shared Responsibility for applicable large employers (an average of 50 or more full-time equivalent employees during the prior year) expires on January 1, 2017.
Applicable large employers have to offer ACA-compliant coverage to their employees starting at the beginning of the new year (2017).
2. Flex Contribution Relief
Flex contribution benefits relief will also expire on January 1, 2017. Employers need to review their contribution strategy and ensure they are not providing any flex contribution relief to those plans.
3. Grandmothered Plans
Grandmothered Plans, plans that are not entirely ACA-compliant and were purchased between March 23, 2010, and October 1, 2013, can continue to be renewed until October 1, 2017.
These plans, though, have to be terminated at a date no later than December 31, 2017. This termination date means that all grandmothered plans, by the end of 2017, regardless of their renewal date, must be terminated.
4. Good Faith Effort
Last year, employers were not assessed any penalties for missing or incorrect data on their IRS Forms 1094-C and 1095-C.
This “good faith effort” has not been extended for next year’s reporting. Employers will need to be fully accurate with their reports to avoid a filing penalty.
5. Wellness Compliance
Your wellness program must now be in compliance with new rules passed by the EEOC in May 2016. Some of the new rules were immediately applicable, but two parts take effect on January 1, 2017.
These parts are that employers comply with “voluntariness” requirements and the maximum 30 percent reward rule.
The “voluntariness” requirement states that:
— Companies may not require employees to participate in a wellness program
— Eligibility for a group health plan, or any benefit offered under the plan, cannot be based on participation in the wellness program, with exception for the 30 percent incentive rule
— Your company cannot make any adverse action or adverse employment action against an employee for exercising their rights under the ADA or encouraging other employees to do so
— Organizations must provide employees with understandable written notice that is understandable and describes the medical information that will be obtained by the wellness program and how it will be used
If your company uses a health risk assessment or biometric screening as a part of your wellness program, you need to understand the maximum 30 percent rule.
Any business that uses either of these tests in their wellness program can have a maximum wellness program reward of 30 percent, for self-only coverage under the employer’s group health plan.
6. No Extra Filing Time
Last year the government granted employers an extended deadline for employee notification and IRS filing deadlines for the Affordable Care Act. These deadlines have not bee extended for 2017.
As of now the deadlines are as follows:
| ACA Information Reporting Forms | 2015 Tax Year Deadlines
(Forms Filed in 2016) |
2016 Tax Year Deadlines (Forms Filed in 2017) |
| Forms 1095-B and 1095-C due to employees | March 31, 2016 | January 31, 2017 |
| Forms 1094-B, 1095-B, 1094-C and 1095-C due to IRS if filing on paper | May 31, 2016 | February 28, 2017 |
| Forms 1094-B, 1095-B, 1094-C and 1095-C due to IRS if filing electronically | June 30, 2016 | March 31, 2017 |
7. Affordability Requirement Percent
Companies must make sure their employer-sponsored coverage will still be considered affordable for the upcoming year.
Beginning January 1, 2017, plans will only be considered affordable if the employee’s required contribution for self-only coverage does not exceed:
— 9.69 percent of an employee’s household income for the year (for ACA employer shared responsibility rules and premium tax credit eligibility)
— 8.16 percent of the employee’s household income for the year (for an exemption from the individual mandate)
8. Summary of Benefits and Coverage Model Documents
Any employer that offers a group health plan will have to be prepared to use new SBC model materials and documents on or after April 1, 2017.
9. Health Savings Accounts Contribution Limits
New maximum HSA contribution limits for next year have been increased by $50. Beginning on January 1, 2017, HSA contribution limits for self-only plans will be $3,400.
10. Risk Mitigation Programs
On January 1, 2017, two of the three “risk mitigation” programs for insurers will expire. The two that will expire are:
— Reinsurance – Payments to plans that enroll higher-cost individuals
— Risk Corridors – Set an allowable range for losses and gains
The elimination of these programs could result in much higher premiums for employers and employees.
11. Mental Health Parity
Verify that your plan meets recent parity guidance concerning coverage of mental health and substance used disorders. Prepare your organization for possible U.S. Department of Labor audits of health plans’ compliance.
The Wrap
Employers need to know what these changes are and what they need to do to stay compliant with them. Save your company thousands of dollars in avoided penalties by understanding each of these alterations.
Just because the ACA isn’t perfect, doesn’t mean your compliance with it can’t be.