Confused about what’s going on with the Affordable Care Act (ACA) in 2018? The plethora of news about potential repeals makes it a challenge for employers to know what to expect in 2018, says Ann Marie Breheny, senior legislative and regulatory advisor at Willis Tower Watson. “After this very intense legislative debate that took a good part of 2017, things haven’t really changed.”
The ACA (also known as Obamacare) requires that employers with 50 or more full-time employees provide health insurance to full-time employees and their dependents. Employers who don’t offer affordable health insurance options are subject to penalties.
What’s most important to know about the ACA for 2018 is that it remains in effect and is being enforced, says Karen Crone, Chief HR Officer of Paycor, a provider of HR and payroll solutions. “It is still the law of the land and we’re still required to offer the benefits,” she says.
Still, some changes will take effect in 2018. For example:
The enrollment period for 2018 is shorter than in previous years, with a cutoff date of Dec. 15, 2017, says Crone.
The affordability standard of job-based health plans has decreased from 9.69% to 9.56% because of the increase in the poverty level in most states, Crone says. This means an affordable plan would require no more than 9.56% of an employee’s monthly household income.
Some preventive care items will be included in the plan in 2018, such as aspirin for adults over 50 who have cardiovascular risk or preventive care for women, such as breast cancer screening, Crone said.
As was the case in 2017, employers may face a time crunch for January filing dates for the ACA reporting forms 1095b and 1095c, informing employees and the IRS about health benefits individuals have received. These additional filings will make the first quarter intensive, Crone says, much like a tax deadline.
ACA penalty notices are coming soon
One of the biggest concerns businesses may have about the ACA isn’t for changes in 2018, but for actions that took place in 2015-2017. Businesses that did not comply with the law's filing requirements are subject to penalties, says R. Pepper Crutcher Jr., Partner at Balch and Bingham — and those penalty notices will be coming out in a few weeks.
Large employers had been told by the IRS that assessments were coming in 2015, 2016 and 2017, but the IRS has been behind on assessing those fees, Crutcher said, so some companies ignored the filing requirements. “Like Chicken Little, they just quit listening,” he said. In addition, with the possibility of an ACA repeal, some employers thought they'd never be affected. But now, Crutcher says, employers may receive three years of catch up tax assessments within a short period. “The surprise is going to be rather like an earthquake that gets aftershocks,” he said.
Employers that do not file correctly or that misclassify employees may receive penalties of $260 per filing, with a $3,193,000 maximum, says Rick Roddis, President of ComplyRight Tax Solutions, a company that provides products for regulatory compliance. And companies that intentionally disregard ACA compliance are subject to a $530 fee per filing, with no maximum limit.
Watch for these assessment letters, Crutcher says. Because the ACA touches HR, payroll, accounts payable and benefits, these departments should be on alert to ensure that if IRS letters arrive, they are not overlooked, Roddis added.
Employers should also follow the lead from the IRS in determining next steps for getting or staying in compliance, says Crutcher. “I expect the IRS notice letter will give fair notice of what to do and when to do it,” he says.
What’s next for the ACA?
Continued action in Congress means that changes may still be in store for the ACA. Because of that, HR leaders should stay alert to see what happens in the healthcare marketplace, Crone says. “There are fewer providers who want to participate in the market and rates are increasing.”
But even as employers seek to stay up to date and compliant, they should also avoid getting confused by the many mixed messages.
Employers should know what things have and have not changed in ACA, says Breheny, emphasizing that most aspects of the requirements are the same. “Try to cut through the noise and see what the results are for each of these developments,” she says.