Prvided by Natinal Insurance Services, Inc. Highlights fr 2017 Cmpliance The Affrdable Care Act (ACA) has made a number f significant changes t grup health plans since the law was enacted in 2010. Many f these key refrms became effective in 2014 and 2015, including health plan design changes, increased wellness prgram incentives and the emplyer shared respnsibility penalties. Certain changes t sme ACA requirements take effect in 2017 fr emplyers spnsring grup health plans, such as increased dllar limits. T prepare fr 2017, emplyers shuld review upcming requirements and develp a cmpliance strategy. This ACA Overview prvides a shrt checklist f the ACA s key changes in 2017. As 2016 draws t a clse, emplyers shuld review this checklist t help cnfirm they are ready t cmply with the ACA s 2017 requirements. Please cntact Natinal Insurance Services, Inc. fr assistance r if yu have questins abut changes that were required in previus years. LINKS AND RESOURCES CHANGES FOR 2017 Certain percentages and dllar amunts have changed fr 2017: Cst- sharing limits Cverage affrdability percentages Maximum penalties fr ACA reprting vilatins Health FSA salary cntributin limits EXPECTED CHANGES FOR 2017 Other updated amunts have nt yet been annunced, but may change fr 2017 (such as the dllar amunts fr calculating emplyer shared respnsibility penalties). HHS Final Ntice f Benefit and Payment Parameters fr 2017 established the cst- sharing limits fr 2017 Revised SBC template, instructins and unifrm glssary (fr use beginning n r after April 1, 2017) 2016 Frms 1094- B and 1095- B (and related instructins) fr reprting under Sectin 6055; 2016 Frms 1094- C and 1095- C (and related instructins) fr reprting under Sectin 6056 This ACA Overview is nt intended t be exhaustive nr shuld any discussin r pinins be cnstrued as legal advice. Readers shuld cntact legal cunsel fr legal advice.
PLAN DESIGN CHANGES Cst- sharing Limits: Nn- grandfathered health plans must cmply with an verall annual limit (r an ut- f- pcket maximum) n cst- sharing fr essential health benefits (EHB). The cst- sharing limit is updated by the Department f Health and Human Services (HHS) each year. Fr the 2017 plan year, the annual limit n ttal enrllee cst- sharing fr EHB is $7,150 fr self- nly cverage and $14,300 fr family cverage. Review yur plan s ut- f- pcket maximum t make sure it cmplies with the ACA s limits fr the 2017 plan year ($7,150 fr self- nly cverage and $14,300 fr family cverage). If yu have a health savings accunt (HSA)- cmpatible high deductible health plan (HDHP), keep in mind that yur plan s ut- f- pcket maximum must be lwer than the ACA s limit. Fr 2017, the ut- f- pcket maximum limit fr HDHPs is $6,550 fr self- nly cverage and $13,100 fr family cverage. If yur plan uses multiple service prviders t administer benefits, cnfirm that the plan will crdinate all claims fr EHB acrss the plan s service prviders, r will divide the ut- f- pcket maximum acrss the categries f benefits, with a cmbined limit that des nt exceed the maximum fr 2017. Cnfirm that the plan applies the self- nly maximum t each individual in the plan, regardless f whether the individual is enrlled in self- nly cverage r family cverage. Health FSA Cntributins: The ACA limits an emplyee s pre- tax salary reductin cntributins t a health flexible spending accunt (FSA) each year. The health FSA limit was $2,550 fr 2015 and 2016, but it will increase t $2,600 fr 2017. Cnfirm that yur health FSA will nt allw emplyees t make pre- tax cntributins in excess f $2,600 fr the 2017 plan year. Cnsider increasing the limit n emplyees pre- tax cntributins t yur health FSA t $2,550 fr the plan year that begins n r after Jan. 1, 2016. advice. Readers shuld cntact legal cunsel fr legal advice. 2
SUMMARY OF BENEFITS AND COVERAGE (SBC) Health plans and health insurance issuers must prvide an SBC t applicants and enrllees t help them understand their cverage and make cverage decisins. The Departments issued a new SBC template and related materials fr use beginning n r after April 1, 2017. Fr self- funded plans, the plan administratr is respnsible fr creating and prviding the SBC. Fr insured plans, the issuer is required t prvide the SBC t the plan spnsr. Bth the plan and the issuer are bligated t prvide the SBC, althugh this bligatin is satisfied fr bth parties if either ne prvides the SBC. Prepare t use the new SBC template as fllws: Plans with annual pen enrllment perids must start using the new template n the first day f the first pen enrllment perid that begins n r after April 1, 2017, with respect t cverage fr plan r plicy years beginning n r after that date. Plans withut an annual pen enrllment perid must start using the new template n the first day f the first plan r plicy year that begins n r after April 1, 2017. If yu have an insured plan, cnfirm whether yur health insurance issuer will assume respnsibility fr prviding SBCs. REINSURANCE FEES Health insurance issuers and self- funded grup health plans that prvide majr medical cverage must pay fees t a reinsurance prgram fr 2014 2016. Fully insured plan spnsrs d nt have t pay the fee directly. Reinsurance fees d nt apply fr 2017 and beynd, althugh the 2016 reinsurance fees will be paid in 2017. Reinsurance fees are based n an annual natinal cntributin rate and are calculated by multiplying the number f cvered lives (emplyees and their dependents) fr all f the entity s plans and cverage that must pay cntributins by the natinal cntributin rate fr the year. Fr 2016, the natinal cntributin rate is $27 per enrllee per year (abut $2.25 per mnth). The fees may be paid in either ne lump sum r in tw installments. Fr plans subject t the reinsurance fee in 2016, submit the 2016 cntributin frm and make apprpriate payments fr the 2016 benefit year, as fllws: If yu are paying in ne lump sum, $27 per cvered life is due by Jan. 15, 2017. If yu are paying in tw installments, $21.60 per cvered life is due by Jan. 15, 2017, and $5.40 per cvered life is due by Nv. 15, 2017. advice. Readers shuld cntact legal cunsel fr legal advice. 3
EMPLOYER SHARED RESPONSIBILITY RULES Under the ACA s emplyer shared respnsibility rules, applicable large emplyers (ALEs) that d nt ffer affrdable, minimum value health cverage t their full- time emplyees (and dependent children) will be subject t penalties if any full- time emplyee receives a subsidy fr health cverage thrugh an Exchange. These emplyer shared respnsibility requirements are als knwn as the emplyer mandate r pay r play rules. Please keep in mind that this sectin includes updates t the emplyer shared respnsibility rules fr 2017. It des nt prvide an in- depth descriptin f the rules r an analysis f hw the rules will affect yur rganizatin. Please cntact Natinal Insurance Services, Inc. fr mre infrmatin n the emplyer shared respnsibility rules, including a mre cmprehensive cmpliance checklist fr 2017. Health Plan Affrdability: An ALE s health cverage is affrdable if the emplyee s required cntributin fr the lwest- cst self- nly cverage that prvides minimum value des nt exceed 9.5 percent f the emplyee s husehld incme fr the taxable year (adjusted t 9.69 percent fr plan years beginning in 2017). Because an ALE generally will nt knw an emplyee s husehld incme, three affrdability safe harbrs may be used t determine the plan s affrdability based n infrmatin that is available t the ALE. These safe harbrs allw an ALE t measure affrdability based n the emplyee s W- 2 wages, the emplyee s rate- f- pay incme r the federal pverty level fr a single individual. Review the cst f yur health plan cverage t determine whether it's affrdable fr yur emplyees by using ne r mre f the affrdability safe harbrs. Fr plan years beginning in 2017, cverage is affrdable if the emplyee prtin f the premium fr the lwest- cst, self- nly cverage that prvides minimum value des nt exceed 9.69 percent f an emplyee's W- 2 wages, rate- f- pay incme r the federal pverty level fr a single individual. The cst f family cverage is nt taken int accunt. advice. Readers shuld cntact legal cunsel fr legal advice. 4
REPORTING OF COVERAGE Sectin 6055: The ACA requires entities that prvide minimum essential cverage, such as every health insurance issuer and spnsr f self- insured health plans, t file annual infrmatin returns with the IRS reprting infrmatin fr each individual wh is prvided with this cverage. Related statements must als be prvided t cvered individuals. Entities reprting under Sectin 6055 will generally use Frms 1094- B and 1095- B (unless the entity is als respnsible fr reprting under Sectin 6056). Sectin 6056: The ACA als requires ALEs (thse emplyers subject t the ACA s emplyer shared respnsibility rules) t reprt infrmatin t the IRS and t their full- time emplyees regarding the emplyer- spnsred health cverage ffered t each full- time emplyee. ALEs reprting under Sectin 6056 will use Frms 1094- C and 1095- C. Fr the 2016 calendar year, reprting deadlines under Sectin 6055 and/r Sectin 6056 are as fllws: Infrmatin returns must be filed with the IRS by Feb. 28, 2017 (r March 31, 2017, if filed electrnically); and Written statements must be furnished t individuals by March 2, 2017. This reflects a 30- day extensin f the furnishing deadline prvided in Ntice 2016-70. Determine which reprting requirements apply t yu and yur health plans. Determine the infrmatin yu will need fr reprting and crdinate internal and external resurces t help cmpile the required data. The final frms t be used fr 2016 reprting cntained certain changes and clarificatins frm the prir year s frms. Cmplete the apprpriate frms. Furnish statements t individuals n r befre March 2, 2017, and file returns with the IRS n r befre Feb. 28, 2017 (March 31, 2017, if filing electrnically). advice. Readers shuld cntact legal cunsel fr legal advice. 5