Here are the 2016 Obamacare updates that you need to be aware of if you’re offering benefits to your employees.  If you’re an employer with a fully-insured plan, you can expect costs to continually increase for 2016-2017.  Alternatives are now being offered through level premium partially self-funded plans, captive plans, and standalone self-funded plans that can stabilize your costs and improve benefits without cost shifting to your employees.  Contact us if you would like more information on these programs.

If you’re an individual with a special enrollment window (i.e. you lost your employer-sponsored health insurance coverage; you recently married or divorced; you moved to another state, etc.), then we can help you find coverage.

Let’s begin with changes under Obamacare.  More employers are subject to the health reform law’s employer mandate.  Starting in 2016, all companies with at least 50 full-time-equivalent employees must offer affordable health coverage to full-timers and their dependents or pay a fine.  To pass muster, the employer’s insurance plan must also provide “minimum value,” meaning that it is designed to pay at least 60% of the cost of covered health benefits and provide substantial coverage of inpatient hospital and physician services.  For 2015, the mandate applied to firms with 100 or more full-time-equivalent workers.

The fines for noncompliance rise.  One hits companies that don’t offer coverage to at least 95% of full-time workers in 2016 if even one full-timer opts to buy insurance through a government exchange and receives a subsidy to help pay the premiums.  For 2016, the fine equals $2,160 times the number of full-time employees, less 30.

Firms offering unaffordable insurance also owe a higher penalty…$3,240 for each full-time employee who gets a tax credit for buying coverage on an exchange.

Employer reporting of worker health coverage kicks in.  Beginning in 2016, companies with 50 or more full-time-equivalent employees must use IRS Form 1095-C to report 2015 insurance data for each full-timer to the Service and the worker.  Firms will also file with the agency Form 1094-C, which requires more information.  Businesses with fewer than 50 employees that provide self-insured medical coverage must also comply.  They’ll use Form 1095-B to report 2015 coverage information to employees and IRS and 1094-B to transmit the health returns to the Service.

The forms are due to employees by March 31 and to IRS by May 31…June 30 if e-filing.  Employers will not be given additional time to make these filings.

The individual mandate’s fine for going without health coverage soars in 2016.  The tax is typically the greater of two amounts:  The basic fine or an income-based levy.  The basic fine is rising to $695 per adult ($347.50 per child) with a family ceiling of $2,085…up from $325 and $975 in 2015.  And the income based levy increases from 2% to 2.5% of the excess of household income over the tax return filing threshold.

The income levels to qualify for the health premium credit in 2016 also go up.  For 2016, it is available to filers with household incomes ranging from 100% to 400% of the 2015 federal poverty level:  $11,770 to $47,080 for singles and $24,250 to $97,000 for a family of four.  Folks eligible for Medicaid or other federal insurance don’t qualify.  Nor do individuals who can get affordable health insurance through their employer.

Cary Hall

America’s Healthcare Advocate