For Individuals....

2021 Open Enrollment

The 2021 Open Enrollment period starts on November 1, 2020 and ends on December 15, 2020 for a January 1, 2021 effective date.  The Open Enrollment allows you to change your health insurance plan or enroll in a new one.  However, even after Open Enrollment has ended, there are some ways to still get health insurance coverage.  You MAY qualify for a Special Enrollment Period if you've had certain life events including, but not limited to, losing health coverage, moving, getting married, having a baby, or adopting a child. If you qualify for an SEP, you have up to 60 days following the event to enroll in a plan.

Fees/Penalties

The fees and penalties for the 2020 plan year have been waived.

For Employers....

Employer mandate

Under the Affordable Care Act’s Employer Shared Responsibility (the “employer mandate”), an ALE may be subject to a penalty if it does not offer to at least 95% of full-time employees coverage that is “affordable” and provides at least “minimum value” (i.e., actuarial value of at least 60%). The ACA provides that coverage is affordable if the employee cost for the lowest-priced self-only coverage available is not more than 9.5% (indexed annually) of the employee’s household income. Regulations allow affordability to be up to 9.5% (indexed) of one of three optional safe harbors, since employers will not actually know each employee’s household income.  The three safe harbors are: 1) W-2 method, 2) Rate-of-Pay, and 3) Federal Poverty Line. 

For example, the maximum employee contribution for 2018 is $96.08 using the Federal Poverty Line (FPL) safe harbor.  This is calculated by multiplying the most current FPL ($12,060 for 2017) by the affordability percentage (9.56% for 2018).

Penalties for Employers that do not offer coverage in 2018

The 9.5% threshold in 2014 increased to 9.56% in 2015, 9.66% in 2016, and 9.69% in 2017. This decrease to 9.56% in 2018 is a reversal from the increases in prior years. This is because the affordability percentage is indexed based on the excess of the rate of premium growth for the preceding calendar year over the rate of income growth for the preceding calendar year. (See Code § 36B(c)(2)(C)(iv) and (b)(3)(A)(ii).)

The two potential employer mandate penalties are the “A” penalty and the “B” penalty, so called because they apply under Code § 4980H(a) or Code § 4980H(b).  An employer will not be subject to either of the two potential penalties unless at least one full-time employee receives a subsidy and buys health insurance in the Health Insurance Marketplace/ Exchange.

• “A” penalty – applies if an employer does not offer at least “minimum essential coverage” (MEC) to at least 95% of full-time employees, and at least one full-time employee buys health insurance in the Marketplace and receives a subsidy. The original penalty amount in 2015 was $177.33/month times the total number of full-time employees the employer had in that month (minus 30 employees), times 12 for the entire year. (12 x $177.33 is $2,080.). The 2018 amount will be $2,320 ($193.33/month).
  

• “B” penalty – applies if an employer offers coverage to employees, but for one or more full-time employees the coverage is either not “affordable” or does not meet “minimum value.” The original penalty amount in 2015 was $260/month for each full-time employee for whom coverage was either not affordable or did not provide at least minimum value. (12 x $260 = $3,120).  An important difference from the “A” penalty is that the “B” penalty calculation does not include all full-time employees, but only those for whom coverage is either not affordable or does not provide at least minimum value.  Additionally, the “B” penalty cannot be more than the “A” penalty would have been if it applied.  The 2018 amount will be $3,480 ($290/month)..

Cadillac Tax

On December 20, 2019, as part of the year-end appropriations bill, the Affordable Care Act's (ACA) so-called 40% "Cadillac Tax" on high-cost health plans was finally, after much lobbying and other efforts by sponsors and health care payers, put to an end with a full repeal. The "Cadillac Tax" was currently scheduled to take effect in 2022 (after two delays), and would have taxed employer-sponsored plans worth more than $10,200 for "self-only" coverage and $27,500 for other coverage (in 2018 and would have been indexed for inflation in future years). The tax was initially intended to help reduce health care costs and pay for the ACA.