Two years into Donald Trump’s presidency and the Affordable Care Act is still, somehow, alive. Despite the push to repeal and replace the ACA, the law remains intact. So, let’s check out what you need to know, as an employer, about ACA compliance for 2018.
What’s Staying the Same (For Now)?
The first important piece of the ACA that’s not changing is the employer mandate. Applicable large employers (ALEs) must provide “minimum essential coverage” to at least 95 percent of their eligible employees. Your business will be heavily penalized if you fail to provide this coverage.
Applicable Large Employers
Also staying the same is the calculation to determine whether an employer is subject to ACA requirements. As previously mentioned, any employer considered an applicable large employer must provide their staff with coverage. A business is regarded as an ALE if they employ an average of 50 or more full-time equivalent employees during the previous calendar year.
Another part of this legislation that’s staying the same in 2018 is the minimum value rule. The minimum value refers to the comprehensiveness of a health plan, i.e., how much it covers. Applicable employers must provide coverage that pays for at least 60 percent of medical expenses. This 60 percent is based on an average for a standard population of employees.
The individual mandate, unlike the employer mandate, is changing soon. Congress, with the passage of the latest tax bill, eliminated the penalties attached to the individual mandate of the ACA. So, individuals will no longer be penalized with a tax if they don’t purchase insurance.
NOTE: The individual mandate is, contrary to popular belief, still in effect for 2018. Next year, 2019 will be the first year the penalty will disappear. Until then, you will still owe the government a penalty if don’t have health insurance or an exemption from the mandate.
While not technically a change, in 2018 the IRS has begun sending enforcement notices to employers. Though, these notices aren’t for the current year. Instead, these notices are for compliance in 2015 through 2017. It’s been estimated the IRS has sent 30,000 notices regarding the employer mandate this year already. Your firm needs to be prepared to both receive and respond to an IRS notice if it comes.
Out-of-Date Form Lines
Some ACA rules have changed due to the enactment of new laws or the expiration of temporary provisions. In some cases, the IRS has failed to update the forms quickly enough. One example, per BenefitsPro, is Form 1094-C. There are lines on this form that only apply to the 2015 and 2016 filing years, and not for 2017.
The minimum value employers must provide remains the same, but the affordability for the 2018 plan year has changed. This year ALEs must provide employees with coverage that doesn’t exceed 9.56 percent of the employee’s household income for the year. This number is down from 9.69 percent in 2017.
Something else changing in 2018 is the list of preventive services any ACA-compliant health plan must cover. These services include covering:
- Depression in adults
- Low dose aspirin for adults over 50 who have cardiovascular risk
- Preventive care for women; such as breast cancer screening
- Syphilis screening for asymptomatic, non-pregnant adults
Finally, the template for the summary of benefits and coverage (SBC) has been updated for 2018. Any insurance company or employer-sponsored health plan must provide those enrolled with a summary of the health plan’s benefits and coverage. Make sure your business is using the new template for these summaries.
During the past two years, the ACA has appeared to be on life support for long stretches of time. So, while we don’t know if the act will survive for much longer, as long as it does, it’s still the law. Make sure your business avoids any unnecessary penalties by staying on top of any updates to ACA compliance for 2018. Check back at The Olson Group anytime an ACA change is announced.