On first day of Compliance, ObamaCare, The Affordable Care Act (ACA) made a number of significant changes to group health plans since the law was enacted in 2010. Many of these key reforms became effective in 2014 and 2015, including health plan design changes, increased wellness program incentives and the employer shared responsibility penalties.

On the third day of Compliance, certain changes to some ACA requirements take effect in 2017 for employers sponsoring group health plans, such as increased dollar limits. To prepare for 2017, employers should review upcoming requirements and develop a compliance strategy.

This ACA Overview provides a short checklist of the ACA’s key changes in 2017. As 2016 draws to a close, employers should review this checklist to help confirm they are ready to comply with the ACA’s 2017 requirements. Please contact Midwest Benefit Advisors, Inc. for assistance or if you have questions about changes that were required in previous years.

ACA Requirement

Cost-sharing Limits: Non-grandfathered health plans must comply with an overall annual limit (or an out-of-pocket maximum) on cost-sharing for essential health benefits (EHB). The cost-sharing limit is updated by the Department of Health and Human Services (HHS) each year.
For the 2017 plan year, the annual limit on total enrollee cost-sharing for EHB is $7,150 for self-only coverage and $14,300 for family coverage.
Action Items
□ Review your plan’s out-of-pocket maximum to make sure it complies with the ACA’s limits for the 2017 plan year ($7,150 for self-only coverage and $14,300 for family coverage).
□ If you have a health savings account (HSA)-compatible high deductible health plan (HDHP), keep in mind that your plan’s out-of-pocket maximum must be lower than the ACA’s limit. For 2017, the out-of-pocket maximum limit for HDHPs is $6,550 for self-only coverage and $13,100 for family coverage.
□ If your plan uses multiple service providers to administer benefits, confirm that the plan will coordinate all claims for EHB across the plan’s service providers, or will divide the out-of-pocket maximum across the categories of benefits, with a combined limit that does not exceed the maximum for 2017.
□ Confirm that the plan applies the self-only maximum to each individual in the plan, regardless of whether the individual is enrolled in self-only coverage or family coverage.
□ Confirm that your health FSA will not allow employees to make pre-tax contributions in excess of $2,600 for the 2017 plan year. Consider increasing the limit on employees’ pre-tax contributions to your health FSA to $2,550 for the plan year that begins on or after Jan. 1, 2016.

ACA Requirement

Health Plan Affordability: An ALE’s health coverage is affordable if the employee’s required contribution for the lowest-cost self-only coverage that provides minimum value does not exceed 9.5 percent of the employee’s household income for the taxable year (adjusted to 9.69 percent for plan years beginning in 2017).

Because an ALE generally will not know an employee’s household income, three affordability safe harbors may be used to determine the plan’s affordability based on information that is available to the ALE. These safe harbors allow an ALE to measure affordability based on the employee’s W-2 wages, the employee’s rate-of-pay income or the federal poverty level for a single individual.

Action Items