What’s New With the ACA in 2016
With the end of 2015 fast approaching, it’s time to start planning for 2016. The coming new year will bring with it new elements of the Patient Protection and Affordable Care Act. The ACA was signed into law on March 23, 2010, but its requirements have gone into effect over time — some by design and others because of delays caused by congressional or legal action.
Here’s what will be new with the ACA in 2016:
The PACE Act
One of the biggest changes is a change that isn’t happening. Under the ACA, the definition of small-group employers was set to change from 2 to 50 employees to 2 to 100 employees on January 1, 2016, making more companies subject to offering small-group plans that contain essential health benefits.
However, President Barack Obama in October signed the Protecting Affordable Coverage for Employees Act, which keeps the definition of a small group at 2 to 50 employees. In addition, it reverts decisions about whether to subject larger employers to ACA mandates back to states, says Joel White, president of the Council for Affordable Health Coverage.
The new requirements that some companies would have faced might have increased premiums and resulted in lost plans in midsize markets, says Debora Ristau, vice president of group benefits for AEPG Wealth Strategies. With states making the decisions, the marketplace should stay more stable, she says.
2016 is the first year that smaller employers, generally those with 50 to 99 full-time employees, will be subject to the ACA’s employer mandate, says Mark Lam, vice president of employee benefits compliance at Assurance. Because the PACE Act was signed so late in the year, it’s possible some employers of this size have already looked at plans that meet small-group requirements, so it may not be until 2017 when both mandates’ full effects are felt.
New Self-Reporting Requirements — and Penalties
Tracking and reporting employee data will remain key for employers in 2016, says Elizabeth Winchell, an associate at Nilan Johnson Lewis.
“Beginning early next year, several ACA reporting requirements will take effect,” Winchell says. “As a result, many employers will need to file annual information returns with the IRS and provide annual statements to employees containing health coverage information.”
Large employers must provide Form 1095-C and small employers must provide Form 1095-B to employees by February 1, 2016, and file with the IRS on or before February 29, 2016 (or March 31, 2016, if they’re filing electronically).
An employer that fails to comply with these reporting requirements by not reporting, or by reporting incompletely or inaccurately, faces penalties of $250 per return, with total calendar year penalties capped at $3 million, Winchell says.
“Penalties are doubled in certain situations, such as when a reporting failure is caused by an employer’s intentional disregard,” she says, although penalties resulting from intentional disregard are not subject to the calendar year cap.
The IRS has indicated that it will not impose penalties in 2016 on employers that can show they made good faith efforts to comply with the reporting requirements, Winchell says.
Open Enrollment Dates Have Changed
Employers should note that because open enrollment began on Nov. 1, 2015, it will end on January 31, 2016. Certain life events, such as getting married, having a baby or losing coverage, may qualify an individual for enrollment outside of the open enrollment period.
Mary Ellen Slayter is CEO and Founder of Reputation Capital Media Services. She has more than 15 years of experience writing about HR and financial services as a journalist and marketer. Any opinions expressed within this document are solely the opinion of the individual author and may not reflect the opinions of Ebix or its personnel.