ACA Tag

HR Compliance Bulletin headerMany health plans provide coverage for employees’ dependent children. Since 2010, the Affordable Care Act (ACA) has imposed strict requirements on plans that provide dependent coverage. These requirements prohibit restrictions that employers had frequently used to limit dependents’ eligibility for coverage prior to 2010.

Specifically, group health plans and health insurance issuers offering group or individual coverage that provide dependent coverage to children on their parents’ plans must make coverage available until the adult child reaches age 26. As employers look for ways to reduce the costs of providing coverage to employees and their families, they may be considering limiting dependent coverage, or imposing additional costs or restrictions on eligibility. However, these measures may be prohibited by the ACA. This Compliance Bulletin provides an overview of the rules that employers must follow when offering dependent coverage.

Employers are responsible for educating their employees about the health coverage options they offer. Now, amid massive uncertainty caused by events such as the COVID-19 pandemic, the upcoming presidential election and the impending court case over the constitutionality of the Affordable Care Act (ACA), employees may be more stressed than ever about the status of their employee benefits.

That’s why it’s so critical to provide transparent and effective communication to employees about their benefits. Talking to Employees About Stressful Current Events Employees may be experiencing stress due to the uncertainty caused by the pandemic, the election and the status of the ACA. While you may not have all the answers, you can explain what’s going on and, if possible, how your organization is or will be responding. Consider the following talking points.

Legal Update HeaderThe Affordable Care Act (ACA) requires applicable large employers (ALEs) to offer affordable, minimum value health coverage to their full-time employees or pay a penalty. This employer mandate provision is also known as the “employer shared responsibility” or “pay or play” rules.

On Aug. 19, 2020, the Internal Revenue Service (IRS) updated its frequently asked questions (FAQs) on the pay or play penalties to include increased penalty amounts for the 2021 calendar year.

News Brief header

The Supreme Court recently announced that it will hear arguments challenging the constitutionality of the Affordable Care Act (ACA) on Nov. 10, 2020—after Election Day.

A verdict on the case is expected to be reached during the spring of 2021. This announcement is the most recent development in this case. Earlier this year, the Supreme Court agreed to hear a legal challenge to the Affordable Care Act (ACA). The case involved is Texas v. Azar, a lawsuit challenging the constitutionality of the ACA’s individual mandate.

Legal Update HeaderOn Aug. 17, 2020, a federal district court granted an injunction blocking a Department of Health and Human Services (HHS) regulation that would have allowed health care and insurance discrimination based on sex stereotyping, gender identity and pregnancy-related conditions.

ACA Section 1557 Regulations

Under Section 1557 of the Affordable Care Act (ACA), discrimination on the “basis of sex” is prohibited in “any health program or activity” that receives federal funds or is administered by a federal agency.

On July 21, 2020, the IRS issued Revenue Procedure 2020-36 to index the contribution percentages in 2021 for determining affordability of an employer’s plan under the Affordable Care Act (ACA).

For plan years beginning in 2021, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed:
  • 9.83% of the employee’s household income for the year, for purposes of both the pay or play rules and premium tax credit eligibility; and
  • 8.27% 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.