New Year, New Regulations
Well, a new year has dawned once again, and after a busy holiday season, 2016 is upon us. We wanted to kick off this year’s newsletters with a featured topic that has been at the forefront of our clients’ minds – the Affordable Care Act. Beginning in 2016, companies with 50 or more employees must offer those employees health insurance. They also must continue adhering to Reporting Requirements that they were required to comply with in 2015. Did you know Advantage’s ACA Reporting Service can take all the tedious guesswork out of creating detailed ACA reports to the IRS? We know the requirements and deadlines seem to be constantly changing, so we have created a roundup of the most important updates to watch out for in 2016:
Here are some basic steps you can take to support these changes:
- The ACA’s automatic enrollment provision will not go into effect and has been repealed indefinitely. Now large employers do not have to worry about adopting new procedures to automatically enroll newly eligible employees on company health insurance plans.
- The ACA Cadillac Tax is a 40% excise tax on costly employer-sponsored health insurance coverage that was set to take effect in 2018 has now been pushed to 2020. Plans subject to the tax are those with benefits valued above $10,200 for single coverage and $27,500 for family coverage. These amounts will be indexed annually for inflation. The Consolidated Appropriations of 2016 not only enacted the delay in effective date for the tax but also made it tax deductible by businesses.
- 2015 ACA Reporting Deadlines have been delayed. Forms 1095-B and 1095-C are now due to employees March 31, 2016. Forms 1094-B, 1095-B, 1094-C, and 1095-C are now due to the IRS May 31, 2016 if not filing electronically or June 30, 2016 if filing electronically.
- The 2015 transitional relief that excluded employers with between 50 and 99 FT or FTE employees from penalties if they failed to provide affordable and adequate coverage will expire as of 2016. All employees with 50+ FT/FTE will be subject to the employer mandate. Penalties will be enforced starting in 2016.
- Starting in 2016, employers must use a 12 month look back period to determine whether or not they meet the threshold requiring them to comply with the employer mandate to offer health insurance to certain employees. Employers also must use a 12 month period to determine if employees are considered FT.
- In 2015, ALEs were required to offer coverage to at least 70% of FT employees. In 2016, this percentage increases to 95%.
- In 2015 there was relief with regards to calculating potential penalties for non-compliance with the ACA. When calculating the “no coverage” penalty employers were permitted to subtract their first 80 FT employees. In 2016 they are only permitted to subtract the first 30.