The Trump administration has halted its efforts to repeal the Affordable Care Act (ACA), also known as Obamacare. What does this mean for employers?
The ACA is here "for the foreseeable future," according to high-ranking Republican officials. As a result, now is a good time for employers to review their ACA compliance and make sure that they are still complying with the law, as it currently stands. If your organization started relaxing its compliance with the ACA requirements this year based on expectations that they were soon to be repealed, you may be accruing significant penalties.
For 2017, the ACA requirements for employer-provided group health coverage continue to include:
- The ACA employer mandate applies to all "applicable large employers" (ALEs)(those with 50 or more full-time equivalents, measured counting employees of all related entities).
- Each ALE member must offer qualifying affordable coverage to at least 95% of its full-time employees and their children up to age 26.
- "Full-time employee" continues to be defined as reasonably expected to work 30 or more hours per week (or, for variable hour employees, averaging 30 or more hours during the look-back period).
- To be affordable, employee premiums can not exceed 9.69% of an employee's taxable wages.
- Depending on the level of noncompliance with the employer mandate, penalties are (a) $2,160 for each full-time employee (minus 30) employed by the ALE member, or (b) $3,240 per full-time employee receiving a subsidy.
- The 2016 Form 1094 was required to be delivered to employees by March 2nd, and the Form 1095 package was due to be filed with the IRS by either February 28th (if paper) or March 31st (if electronic).
- No waiting period exceeding 90 days.
- Coverage must satisfy all content requirements, such as no pre-existing conditions, no annual or lifetime limits on essential health benefits, and no-cost preventive care.
While the Trump administration could choose not to enforce the penalties under the ACA, or to take other steps to weaken the current provisions, employers who choose not to comply with the law as in effect may be creating a risk of significant penalties. Any decisions in this regard should be made only after consulting legal counsel.