Businesses need to prepare for 2016 health insurance changes

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By Kelly Dyer, Manager of Entrepreneurship & Business Development, Missouri Chamber of Commerce and Industry

Ever since the Affordable Care Act was signed into law five years ago, the federal legislation has brought annual changes that require businesses to adjust their practices.

The slow rollout continues in 2016 with several new provisions that Missouri businesses need to consider.

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Kelly Dyer

While the 2016 changes are easy to summarize, the complexities of the law mean it is impossible to offer broad advice as to how businesses should respond—every business will need their own plan.

As business leaders study their options this year, the Missouri Chamber of Commerce and Industry is ready to help. Through a partnership with the Missouri Small Business Technology and Development Centers, the Missouri Chamber now has an Affordable Care Act expert on staff who can help advise companies on how to navigate the changes coming in 2016.

If you have questions after reading about these upcoming issues, contact me at kdyer@mochamber.com or by phone at 573.634.3511.

Shared Responsibility

It’s well known that if large employers choose not to offer affordable insurance to their employees, they have to pay penalties. The federal government calls these penalties “Shared Responsibility” payments.

In 2015, employers with 100 or more staff members had to provide affordable health insurance. In 2016, that number drops to 50 or more employees. Businesses of that size that don’t offer affordable insurance will have to pay Shared Responsibility payments this year.

With the high cost of insurance, some companies are considering whether the Shared Responsibility payments would actually be cheaper than offering insurance. It’s possible, but complex, to make that determination. Many factors come into play and the answer will be different for every company.

If you need help making this calculation, contact me.

New Paperwork

For the first time, employers have to file health insurance reports with the IRS at the end of tax year 2015. The deadline for filing this paperwork is February 29, 2016 if filed by mail and March 31, 2016 if filing electronically.

The applicable forms are available at irs.gov. For example, forms 1094-C and 1095-C apply to employers that pay Shared Responsibility payments.   Applicable Large Employers must file a Form 1095-C for each employee who was a full-time employee of the employer for any month of the calendar year by January 31, 2016.

It’s unknown at this point what kind of penalties employers could face for failing to file the correct paperwork detailing their health insurance offerings. It’s likely the IRS will be more lenient this year as employers are still learning this new requirement, but we don’t know for sure.

If you need assistance finding the correct forms, I am happy to help.

Family Glitch

It’s common knowledge that the goal of the Affordable Care Act is to give more people access to health insurance. However, experts have uncovered one situation where businesses can actually hurt their employees by extending a certain kind of health benefit—a family plan.

The health care act requires that large employers provide affordable individual coverage to their employees. Many employers may consider taking this one step further and providing a family health insurance plan. However, in some situations, offering a high-priced family plan will disqualify family members from receiving federal tax credits that greatly reduce the cost of insurance they can buy on the health insurance marketplace. This has become known as the “family glitch.”

Before adding family health insurance coverage, employers should consider whether this benefit might actually make it harder for families to receive affordable coverage.

Call me if you need help figuring out how your health plans could impact your staff members’ families.

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