Simplify Your Benefits and HR
It’s time for your benefits and HR management to catch up to the rest of your company! NHA Navigator allows you to simplify and streamline your HR and benefits into one easy to use system. Use NHA Navigator for benefit elections, new hire on-boarding, ACA compliance and reporting, and so much more!
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Top 4 Changes to “Pay or Play” for 2016
It is never too early for applicable large employers (ALEs)-generally those with 50 or more full-time employees , including full-time equivalent employees (FTEs), in the preceding calendar year-to begin preparing for the 2016 compliance season. With the end of the 2016 calendar year quickly approaching, employers should take a moment to review the pay or play provisions that have changed for 2016.
Top 4 Changes for 2016
The following are the top 4 changes to pay or play for 2016:
- Transition Relief Expired: The transition relief which delayed compliance with the pay or play requirements for ALEs with 50 to 99 full-time employees (including FTEs) in 2015 is now expired for employers with calendar year health plans. For ALEs with non-calendar year health plans, this transition relief, along with the transition relief for dependent coverage, continues to apply for any calendar month during the 2015 plan year that falls in 2016.
- New Affordability Threshold: If an employee’s share of the premium for employer-provided coverage in 2016 would cost the employee more than 9.66% (formerly 9.56%) of his or her annual household income, the coverage is considered unaffordable to that employee. Employers offering unaffordable coverage may be subject to a pay or play penalty.
- Coverage Thresholds Increased: For 2016, ALEs will now be liable for a penalty if they:
- Do not offer health coverage or offer coverage to fewer than 95% (formerly 70%) of their full-time employees (and their dependents), and at least one full-time employee receives a premium tax credit; or
- Offer health coverage to at least 95% (formerly 70%) of their full-time employees (and their dependents), but at least one full-time employee receives a premium tax credit.
- Increased Noncompliance Penalties: For 2016, the general annual penalty for ALEs that do not offer coverage or offer coverage to fewer than 95% of their full-time employees (and their dependents) is $2,160 (formerly $2,080) per full-time employee, minus up to 30 full-time employees. For ALEs offering coverage to at least 95% of their full-time employees (and their dependents), the general annual penalty is $3,240 (formerly $3,120) per full-time employee that receives a premium tax credit.
Medicare Part D Notice Due by October 14th
In preparation for the Medicare fall open enrollment period, employers sponsoring group health plans that include prescription drug coverage are required to notify all Medicare-eligible individuals whether such coverage is creditable. Creditable coverage means that the coverage is expected to pay, on average, as much as the standard Medicare prescription drug coverage.
Written Disclosure to Individuals
Medicare-eligible active working individuals and their dependents (including a Medicare-eligible individual when he or she joins the plan);This written disclosure notice must be provided annually by October 14, and at various other times as required under the law, to the following individuals:
- Medicare-eligible COBRA individuals and their dependents;
- Medicare-eligible disabled individuals covered under an employer’s prescription drug plan; and
- Any retirees and their dependents.
Model notices are available from the Centers for Medicare & Medicaid Services (CMS).
Online Disclosure to CMS Also Required
Additionally, employers are required to complete an online disclosure to CMS to report the creditable coverage status of their prescription drug plans. This disclosure is also required annually, no later than 60 days from the beginning of a plan year, and at certain other times.
Employer Appeal Request Form Available for Employers Receiving Marketplace Notices
Appeals Must Be Made Within 90 Days
As a reminder, Health Insurance Marketplaces are now sending letters to notify certain employers that one or more of their employees has been determined eligible for advance premium tax credits and cost-sharing reductions and has enrolled in a Marketplace plan. Because these events may trigger employer penalties under the Affordable Care Act’s “pay or play” provisions, employers may seek to appeal an employee’s eligibility determination. An employer appeal request form is available from the U.S. Department of Health and Human Services for this purpose.
Employer Appeals Process
Marketplaces must notify employers within a reasonable time frame following any month of the employee’s eligibility determination and enrollment. Employers have 90 days from the date stated on the Marketplace notice to file an appeal. In the appeal, the employer may assert that it provides its employee access to affordable, minimum value employer-sponsored coverage or that its employee is enrolled in employer coverage, and therefore that the employee is ineligible for advance payments of the premium tax credit or cost-sharing reductions.
An appeal will not determine if the employer is subject to a “pay or play” penalty, as only the IRS, not the Marketplace or the Marketplace Appeals Center, can make such determinations. Click here for more on the appeals process.