![]() "Many employers use the FPL safe harbor to develop employee contributions for self-only coverage to avoid ACA assessments under section 4980H," which the ACA added to the tax code, Stover and Laderman noted. "Employers should double check their anticipated 2018 premiums now to prevent the need for mid-year changes." "Because the 2018 affordability rate is lower than the 2017 affordability rate, applicable large employers may need to reduce their employees' share of premium contributions to maintain affordable coverage,"Ĭommented Danielle Capilla, chief compliance officer at United Benefit Advisors. Employers "may be able to increase the required employee contribution for their lowest-cost self-only coverage and still satisfy one of the safe harbors." "Employers should consider the adjustments to the affordability contribution percentage in developing a contribution strategy for 2018," wrote Richard Stover and Leslye Laderman, consultants with Conduent HR Services, The individual Federal Poverty Level (FPL)-Since the FPL isn't officially published until January, employers can use the FPL in effect six months prior to the beginning of the plan year.įor 2018, the maximum monthly premium contribution that meets the FPL safe harbor will be 9.56 percent of the prior year's federal poverty level ($12,060 in most states for 2017) divided by 12, or $96.08.The employee's rate of pay-hourly wage rate x 130 hours, as of the first day of the plan year.The employee's W-2 wages-as reported in Box 1-generally as of the first day of the plan year (see.Since employers don't know their employees' household incomes, the ACA created a safe harbor in which any of the following can be used in lieu of household income: ![]() For plan years beginning in 2018, employer-sponsored coverage will be considered affordable if an employee's required contribution for self-only coverage for the least-expensive plan option that meets ACA requirements does not exceed 9.56 percent of the employee's household income for the year (down from 9.69 percent in 2017). The 2018 shared-responsibility affordability percentage. In May, the IRS announced in Revenue Procedure 2017-36 The Affordable Care Act (ACA) has many moving parts, and not to be overlooked is the annual inflation-adjusted shift in what constitutes "affordable" health care coverage.
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