As a business owner, you have to stay informed about all things business affecting your bottom line, including new healthcare law changes. There are quite a few changes underway for your business in the coming year. Here are some impending Affordable Care Act (ACA) changes expected to occur in 2016 that you as a business owner should be prepared for as you gear up for a successful year.
Fines for Businesses
As an employer, you are subject to fines up to $3,000 per employee if you fail to offer insurance to your employees. This mandate actually applies to businesses with more than 49 employees. Not only do you have to offer insurance to employees, but there must also be an option to insure the family’s dependents.
Look out for Rate Increases
You can expect communications from your insurance carrier about rate hikes. According to federal law, carriers are now required to supply that information to the Office of the Insurance Commissioner. Some research indicates that at least twelve insurance carriers are planning to increase their rates by 50 percent or more. According to experts from top health law schools, other carriers are looking at 20-40% rate hikes over the next year. While the bulk of the rate increases are expected to be anywhere between twenty and forty percent, business owners should discuss these rate changes with their carriers.
Essential Coverage
Employers are now classified as large if they have at least 51 employees. Ninety-five percent of full time employers will be required to be offer essential coverage to 95 percent of full time employees. The essential coverage offered to employees must be affordable. This change is different from the previous year, where the mandate was required of companies employing at least 100 employees.
Employers and Out-of-Network Expenses
You can now require your employees to pay up to $6,850 per individual for out-of-pocket costs. This includes deductibles, copays and coinsurance. For families, that amount is $13,700. Certain plans may not be affected by this provision, so you may want to verify whether or not your plan is considered transitional.
Reporting Requirements
You will now also have be responsible for meeting reporting requirements. According to the new provision, there are IRS penalties in place for non-compliant employers. If the employer fails to meet large employer reporting requirements or offer individual statements regarding full time employers, you may be on the hook for even higher penalties.
Business owners should be aware of these ACA changes scheduled to take place in 2016. Planning ahead for these changes will ensure that you are financially prepared and that your employees are in the loop. As these changes unfold, you may want to consider evaluating other options for more competitive rates.
Emma Sturgis is a freelance writer living in Boston. She writes on a variety of things, most often real estate and education. When not writing, she enjoys reading, rock climbing, and film noir. Twitter: @emmasturgis2
