aron & Associates, Inc.
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.
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.