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5 Biggest Changes to ACA in 2016: Are You in Compliance?

03/24/2016

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Big changes to the Affordable Care Act were put into place at the beginning of 2016. Make sure you are familiar and in compliance with the updates, so you're not hit with penalties.

The five biggest changes to the ACA for 2016:

Small Employer Definition

Perhaps the biggest change to ACA in 2016 is the accepted definition of “small employer.” Previously, a “small employer” was defined as a business with between one and 50 full-time equivalent (FTE) employees. However, for plans starting in 2016, the definition has expanded to include businesses with 100 employees. Employers with 51 to 100 employers will now have to comply with ACA requirements, including plans that cover essential health benefits and meet ratings requirements. 

Employer Mandate

There are more changes for businesses with 50 to 100 employees. While they may be considered a small group employer for insurance purposes, they will be considered a large group employer for Employer Mandate penalty calculations. Employers are now required to offer affordable, minimum essential health coverage to at least 95 percent of their full-time employees, as well as their dependents (up to age 26), or pay a penalty. Previously, this mandate had only applied to businesses with over 100 employees but will now apply to employers who have between 50 and 100 full-time employees.

Small Business Health Options Program

Businesses with 50 to 100 full-time employees are now able to use the Small Business Health Options Program (SHOP) online marketplace to purchase or review health care plans for employees. Prior to 2016, SHOP was only available to businesses with 50 employees or less. 

Out-of-Pocket Maximum

Beginning in 2016, the out-of-pocket maximum (including deductibles, copays, and coinsurance) that employees may be required to pay before health coverage kicks in will increase to $6,850 for an individual and $13,700 for family coverage. If an individual protected under family coverage should need care, then the maximum out-of-pocket expense before coverage starts is also $6,850. 

IRS Penalties

Penalties have increased in 2016 for failing to meet applicable large employer reporting requirements or failing to provide individual statements to all full-time employees. Penalty caps have also increased. For a full list of information reporting requirements and penalties, check out the IRS's site here.

Keeping up with the ever changing nature of the ACA can be tricky. Luckily LBMC Employment Partners is well versed in everything ACA, and we can help you ensure that you are complying with all policies and regulations. Contact your local LBMC EP representative today!

Sources:
Free Press: ACA 2016 Updates
Blue Cross Blue Shield Open Enrollment

Posted in: Healthcare, ACA