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2017 Pay or Play Penalty and Affordability Amounts Announced

The IRS has updated information regarding the Affordable Care Act’s employer shared responsibility (pay or play) requirements to reflect adjustments to the penalty and affordability amounts. Those adjustments are as follows: For calendar year 2017, the applicable peremployee dollar penalties of $2,000 and $3,000 are adjusted to $2,260 and $3,390 respectively. For plans beginning in 2017, the affordability threshold for purposes of both the pay or play affordability safe harbors and the premium tax credit provisions is 9.69%.

CMS Issues Final Rule and Related Guidance for Marketplace Stability

The Centers for Medicare & Medicaid Services (CMS) issued the final rule on Market Stabilization under the Affordable Care Act (ACA). The Final Rule aims to lower insurance premiums, stabilize individual and small group markets, reduce fraud, promote continuous coverage, and empower states. To accomplish these goals, the Final Rule makes several policy changes, including: • Amending the annual open enrollment period to November 1, 2017 to December 15, 2017 for the 2018 plan year. • Requiring individuals to submit supporting documentation if they want to sign up for Marketplace coverage during special enrollment periods. • Allowing insurance carriers the ability to require individuals to pay back past-due premiums before enrolling in a plan with the same carrier the following year. • Allowing insurance carriers additional actuarial value flexibility to enable them to develop more plan choices with lower premium options for consumers. • Providing states with the ability to evaluate and oversee the adequacy of health care networks within their borders and eliminating duplicative review of network adequacy by the federal government. In addition to the Final Rule, CMS issued guidance regarding the process that insurance carriers must follow to meet the requirements of the Final Rule and have their plans certified for the 2018 plan year. The Final Rule will become effective on June 19, 2017.

Employee Benefits: Limits on Annual Out-of-Pocket Maximums

All non-grandfathered health plans, including small group, large group, and self-funded plans, are subject to limits on annual out-of-pocket maximums. All cost sharing to include copays, deductibles, and co-insurance, for Essential Health Benefits must accumulate to the plan's out-of-pocket maximums up to the following limits: $6,850 for self-only coverage and $13,700 for family coverage ($6,850 per person).

IRS Releases 2018 Inflation Adjusted Amounts for Health Savings Accounts

Contribution Limits The IRS has released the 2018 cost-of-living adjustments affecting Health Savings Accounts (HSAs) and High Deductible Health Plans (HDHPs). The 2018 annual HSA contribution limit for single coverage is $3,450 and the limit for family coverage is $6,900. Out-of-Pocket Maximums The 2018 maximum limit on out-of-pocket expenses (including items such as deductibles, co-payments, and co-insurance) for single coverage is $6,650 and the limit for family coverage is $13,300. Minimum Required Deductibles The 2018 minimum annual deductible for single coverage is $1,350 and the minimum annual deductible for family coverage is $2,700.

PCORI Fees Due July 31

Overview Effective for plan years ending on or after October 1, 2012, and before October 1, 2019, employers that sponsor self-funded health plans are responsible for Patient-Centered Outcomes Research Institute (PCORI) fees. Fees for plan years that ended in 2016 are due July 31, 2017. How to Pay PCORI Fees Employers that sponsor self-funded health plans must report and pay the required PCORI fees via IRS Form 720, Quarterly Federal Excise Tax Return. • For plan years ending between January 1, 2016, and September 30, 2016, the fee is $2.17 multiplied by the average number of lives covered under the plan. • For plan years ending between October 1, 2016, and December 31, 2016, the fee is $2.26 multiplied by the average number of lives covered under the plan.