End of 2015 Employer Checklist for ACA Compliance/Health Care Reform
The Internal Revenue Services Recently released updated reporting forms for 2015 to ensure that businesses continue to remain compliant with ACA compliance/health care reform. Although the government expects to release a final version of the forms before the end of the year, employers can still do a number of things to prepare themselves to make sure that their companies remain compliant. Here’s a checklist that will help your business remain on the road to health care reform.
Grandfathered health care plans are those that were in place before the ACA was passed in 2010. Certain changes to plans that go beyond permitted guidelines may mean that your plan is no longer grandfathered. If you have a grandfathered plan, make sure it will retain its status beyond 2015 and if so, continue to provide notice to employees and new hires about its status. If your health care plan loses its grandfathered status in 2015, make sure that it has all additional rights and benefits required by the ACA such as cost of preventative care without cost-sharing.
Health care plans beginning after Jan. 1, 2014 are subject to out-of-pocket maximums for essential health benefits (EHB). Those maximums are $6,600 for individual coverage and $13,200 for family coverage. Review your maximums to make sure they comply with ACA limits. If your company provides employees with a high deductible health plan (HDHP) that is compatible with a health care savings (HSA) account, your plans maximum must remain lower than the ACA’s limit. The maximum for HDHPs is $6,450 for individual coverage and $12,900 for family plans. When using multiple service providers for benefits administration, make sure that combined EHB plan limits do not exceed the 2015 guidelines. Businesses also need to be aware that the ACA’s annual deductible limit no longer applies to small insured health plans.
Health FSA Contributions
Annual employee pre-tax salary reductions for plans beginning on or after Jan 1, 2013 have been limited to $2,500. The amount of employer contributions remains unaffected. The federal government, however, is expected to change the amount of pre-tax dollars that employees can contribute to health flexible spending accounts to reflect cost-of-living adjustments. the IRS will release the health FSA limit later this year. Once that limit has been announced, ensure that employees will not make contributions in excess of the stated limit and make that limit clear during open enrollment.
The first deadline for employers to file a statement with the Department of Health and Human Services is on Dec. 31, 2015. Businesses must certify that they comply with:
Eligibility for a health plan
Health care claim status
Electronic funds transfer EFT) and remittance advice
Analyze your plan to determine whether you have a controlling health plan (CHP) that is required to provide initial certification. If your plan is self-insured, work with your administrator to make sure that compliance occurs.
Affordability of Coverage
Health care plans are considered affordable under the ACA if the employee’s contribution does not exceed 9.5% of annual household income, defined as the modified gross income of the employee and any additional household members. The IRS has provided three safe harbors that employers can use to determine affordability. These include W-2 wages, an employee’s rate of pay or the federal poverty level for an individual. The ACA also provides for minimum value of health care plans whereby the plan’s share of total allowed costs of benefits is at least 60% of those costs. Determine whether your plan is affordable for employees by using one or more of the affordability safe harbors. Similarly, determine whether the plan provides minimum value by using the minimum value calculation provided by HHS, safe harbor checklists, actuarial certification or metal level method.
For more information on navigating the complexities of ACA compliance, contact us at SurmountHRM.