On July 23, 2019, the IRS issued Revenue Procedure 2019-29 to index the contribution percentages in 2020 for determining affordability of an employer’s plan under the Affordable Care Act (ACA). For plan years beginning in 2020, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed:
- 78% of the employee’s household income for the year, for purposes of both the pay or play rules and premium tax credit eligibility; and
- 24% of the employee’s household income for the year, for purposes of an individual mandate exemption (adjusted under separate guidance). Although this penalty was reduced to zero in 2019, some individuals may need to claim an exemption for other purposes.
Hold your questions until the end, please.
You know what we can’t stand about a text message announcement? You cannot respond with a question. The same goes for an email. Sometimes the info is timely and useful, but what if you have a follow-up question or require a point of clarification?
Those forms of communication may work well for quick reminders (think “Don’t forget to enroll” or “Three more days until open enrollment closes”), but what about the big stuff? We’re talking more complicated or nuanced items like changes in cost sharing, a new type of plan, or updated eligibility rules. (more…)
Employee cost share is defined as the percent of total medical and Rx plan costs paid by employees. This number includes employee contributions, as well as copays, deductibles, and coinsurance. Often, when companies report cost share, they only focus on employee contributions. But with the prevalence of high deductible plans, it’s more important than ever to ensure companies measure and manage the entire employee outlay and its relation to total cost. (more…)
Beginning in 2020, employers of all sizes may implement a new HRA design – an individual coverage HRA (ICHRA) – to reimburse their eligible employees for insurance policies purchased in the individual market or Medicare premiums.
Final rules released by the Departments of Labor, Health and Human Services (HHS) and the Treasury (Departments) permit employers to offer an ICHRA as an alternative to traditional group health plan coverage, subject to certain conditions. One of these conditions is that employees and dependents who are covered by an ICHRA must be enrolled in individual insurance coverage or Medicare coverage for each month they are covered by the ICHRA. Also, employers that sponsor ICHRAs must comply with an annual notice requirement.
Employers may allow employees to pay for off-Exchange health insurance on a tax-favored basis, using a Section 125 cafeteria plan, to make up any portion of the premium that is not covered by the employer’s ICHRA. (more…)