Compliance Reminders with 2019 Approaching
For many, the 4th quarter is the most demanding time of year, with an abundance of items to check off to-do lists before 2018 fades away. Amongst them, with 2019 rapidly looming, there are some key benefits compliance elements to bear in mind, indicated below.
ACA Reporting / Sections 6055 and 6056:
The likely most dreaded item, ACA reporting, while not due until early 2019, should already be in the works.
Under the Internal Revenue Code (IRC) Sections 6055 and 6056 reporting rules, certain employers must provide information to the IRS and their employees about the health plan coverage they offer, or do not offer, to their employees. The requirements vary based on an employer’s size and medical funding status. While the most burdensome apply to applicable large employers (ALEs) with 50 or more full time plus full time equivalent employees, even small employers with self or level funded medical plans have obligations pertaining to this.
Please refer to our reporting chart, outlining what requirements apply to which employers and by when. The first deadline, for distribution of forms to employees, is January 31, 2019. Please refer to our reporting guide for additional information.
For plan years starting in 2019, affordability under ACA is changing from 9.56% to 9.86% of the lowest-cost, self-only coverage offered. ALEs can be penalized financially for either not offering health coverage meeting certain criteria, or not offering coverage that meets ACA’s affordability, if a full-time employee enrolls in subsidized individual exchange coverage.
While small employers (non-ALEs) are not subject to the employer shared responsibility provisions under ACA, whether or not health coverage offered is affordable by ACA guidelines will impact an employee’s ability to obtain subsidized individual exchange coverage.
Individual Mandate Penalty:
While the individual mandate will remain in effect, the financial penalty associated with not maintaining health coverage will be eliminated as of January 1, 2019, as part of the Tax Cuts and Jobs Act, signed in December of 2017. For the 2018 tax filing year, the penalty still applies, although exemptions are available. In response, however, to this federal penalty elimination, some states are exploring the option of implementing an individual mandate on a state level. New Jersey, in particular, enacted legislation earlier this year, which will go into effect as of January 1, 2019, requiring New Jersey residents to maintain health coverage or pay a penalty for not doing so.
Health Savings Account (HSA) Contributions:
In 2019, the IRS maximum contribution limits will increase for a single from $3,450 to $3,500. For a family, maximum contributions will increase from $6,950 to $7,000. Catch-up contributions, for those aged 55 and over, remain unchanged at $1,000.
If you have questions concerning the responsibilities for your organization, please contact your Exude Consultant.