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ACA Changes on the Horizon for 2016

Dec 21, 2015

Refe_566d26cf0bd71_photo-1421986527537-888d998adb74.jpgPhoto: Refe

The New Year is upon us and although many organizations will remain in a 2015 state-of-mind with regard to tax returns, it is imperative that planning for changes to the ACA in 2016 be happening simultaneously. Below is a brief run-down on what businesses can expect to shift for them in the next 12 months:

  • While in 2015, employers with 50-99 full-time employees got a pass on the ACA employer mandate, this will change in 2016 with all applicable large employers (ALEs; 50+ full-time equivalent employees (FTEs)) being required to offer affordable health coverage for qualifying employees.
  • Along those lines, in 2015 ALEs with 100+ FTEs were required to offer affordable health coverage to at least 70% of qualifying employees; in 2016, ALEs with 50+ FTEs will be required to offer coverage to at least 95% of qualifying employees.
  • In 2015, ALEs with 100+ FTEs could exclude the first 80 employees from any employer mandate penalty fees; in 2016, ALEs with 50+ FTEs will only be able to exclude the first 30 employees from penalty fees.
  • In 2016, the maximum out-of-pocket cost for in-network care will increase to $6,850 for individuals and $13,700 for family coverage (in 2015 the figures were $6,600 and $13,200 respectively).
  • In 2016, the penalties for the ACA employer mandate will also increase. For ALEs that fail to offer any healthcare coverage, the fee will be $2,160 divided by 12, multiplied by the number of full-time employees; for ALEs that fail to offer affordable coverage, the fee will be $3,240 divided by 12, for every month that each full-time employee receives a premium tax credit (in 2015 the fees were $2008 and $3120 respectively)

To learn more about the new ACA penalties, download
The Nonstop Guide to ACA Penalties for the 2015 Tax Year

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  • On October 7, 2015 President Obama signed into law the Protecting Affordable Coverage for Employees (PACE) Act, which effectively disbanded the original plan for organizations with 51-100 FTEs to be labeled as “small employers” on January 1, 2016. However individual states can override the PACE Act, which would mandate ALEs with 51-100 employees to adhere to both the employer mandate and requirements for small businesses. It is recommended that ALEs with less than 100 FTEs check with their state Department of Insurance to confirm their status as of January 1, 2016.
  • Similarly, starting in 2016 some states will allow ALEs with 50-99 FTEs to use the Small Business Health Options Program (SHOP) Marketplace to provide health coverage for employees. It is recommended that ALEs with less than 100 FTEs contact their state Department of Insurance or the SHOP call center at 1-800-706-7893 to determine eligibility.

In addition, 2016 marks an election year, which will bring its own set of proposals for changes to the ACA.  Specifically the Cadillac plan is front-and-center in the healthcare debate, with calls to eliminate it all together. And although experts doubt a full repeal of the ACA is a possibility at this point, some presidential contenders are proposing significant reforms. While none of these proposed changes would go into effect in 2016, it is worth noting how any and all may impact your organization. 

The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources believed to be reliable, but there is no guarantee as to its accuracy. This communication does not constitute a legal opinion and should not be relied upon for any purpose other than its intended educational purpose.

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