Another year, another annual inflation-adjusted shift in cost-sharing limits for group health plan coverage. In layman’s terms, this basically means the IRB released the 2019 updates to the Affordable Care Act; this is important for your practice as it affects the lowest price at which you must offer your employees insurance. This percentage changes every year based on inflation. Below is some information your practice will need to know to ensure you comply with the 2019 requirements.
Employers might want to consider pricing at least one plan option below the affordability standard (which is the highest percentage of household income an employee must pay for monthly premiums). This is based on the least expensive employer-provided plan that meets the ACE’s minimum essential coverage.
According to Ryan Moulder, an LA partner at Health Care Attorney PC and general counsel at Accord Systems, LLC: “An employer is in control as to whether the plan it is offering meets the affordability threshold. The significant increase [for 2019] compared to 2018 provides an employer that is toeing the line of the affordability threshold an opportunity to increase the price of its health insurance while continuing to provide affordable coverage.”
2019 FPL Safe Harbor
The FPL safe harbor can be used to develop contributions for self-only coverage so a practice can avoid ACA penalties under Section 4980H(b). According to Richard Stover and Leslye Laderman, “Using the FPL safe harbor also simplifies ACA reporting and coding of Form 1095-C.”
In 2019, 9.86 percent of the previous year’s federal poverty level is the maximum monthly premium contribution meeting the FPL safe harbor.
Shared Responsibility Penalty
For companies with 50 or more full time employees, the IRS can issue a penalty if they fail to offer the minimum essential coverage for employees and their dependents. Failure to do so can result in penalties estimated around $3,750 per employee, which is $270 more each than the previous year.
What questions do you have about changes to ACA? Share in the comments below.