ACA employer requirements generally apply to health plans that cover two or more employees. One-employee payment plans that cover only one employee are exempt; these plans are not subject to ACA excise taxes (penalties).
Some requirements apply to employers; others, to plan sponsors or employer plans; still others, to employees. Therefore, the group affected is listed in parentheses after the provision. In addition, some features that were effective before 2016 are included for your reference. Click on a year below to navigate to that year's requirements.
2011 2014 2017
2012 2015 2020
Small Employer Healthcare Tax Credit (employers): The Small Employer Healthcare Tax Credit, available for tax years through 2013, encourages small employers to provide healthcare coverage to their employees. Those small employers that meet the criteria may qualify for a Tax Credit of up to 25 percent of the employer’s healthcare coverage costs. For tax years beginning in 2014 and later, the maximum tax credit is 35 percent of the employer's healthcare coverage costs. To be eligible for the credit, a small employer must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program (SHOP) marketplace or qualify for an exception to this requirement.
Exclusion of over-the-counter drugs from FSAs (members): Healthcare Flexible Spending Accounts (FSAs) may not reimburse expenses for over-the-counter drugs purchased without a prescription. Only payments for prescription drugs and insulin can be reimbursed from a healthcare FSA.
Medicare preventive care coverage (members): Medicare covers 100 percent of defined preventive services for Medicare beneficiaries. These services include annual well visits, personalized prevention plans, routine vaccines, colorectal cancer screenings, and screening mammograms.
Summary of benefits and coverage (members): The Board of Pensions is required to distribute to each Medical Plan member an up-to-date summary of benefits and coverage annually. The summary, presented in a format established by the U.S. Department of Health and Human Services (HHS), is intended to help consumers compare health plans as they make health plan choices.
The Board of Pensions distributes a summary of benefits and coverage for the Medical Plan of the PC(USA) to all active plan members when they enroll, each November, and upon request. The 2017 summary is available on pensions.org.
Value of healthcare coverage on W-2s (employers): Most employers are required to provide information on the value of healthcare coverage on an employee’s W-2 beginning with the 2012 tax year. However, as a church plan, the Medical Plan of the PC(USA) is exempt from this reporting requirement.
Churches and other employing organizations that provide healthcare coverage to employees through another entity should contact their insurance provider or broker, as they may be required to provide covered employees with the value of that coverage beginning with their 2012 W-2s (i.e., on W-2s issued in January 2013).
Notice of Healthcare Coverage Options (employers and members): The ACA requires employers to provide written notice to all employees, both full- and part-time, describing the existence of state health insurance marketplaces (formerly exchanges) by October 1, 2013, and within 14 days of a new employee’s date of hire. The Board provided sample notices and a sample cover letter for employers’ use (see Healthcare Reform Resources box on the Healthcare Reform page).
Medicare payroll tax increase for higher-income taxpayers (employers and members): Effective for the tax year beginning January 1, 2013, a Medicare surtax of 0.9 percent will be applied to higher income earners (individuals with wages in excess of $200,000 and joint filers with wages in excess of $250,000).
Medicare unearned income tax on higher-income taxpayers (employers and members): Effective for the tax year beginning January 1, 2013, higher-income taxpayers (individuals with wages in excess of $200,000 and joint filers with wages in excess of $250,000) will pay a 3.8 percent Medicare tax on unearned income (e.g., investment income).
Limit on FSA contributions (members): Beginning January 1, 2013, contributions to all healthcare Flexible Spending Accounts (FSAs) were limited by federal law to $2,500 a year. Note that as of 2016, contributions to all healthcare FSAs are limited by federal law to $2,550 a year. The limit may continue to increase in future years.
Patient-Centered Outcomes Research Institute fee (plan sponsors): Certain health plans, including self-funded plans, must pay $1 for each person covered from May through December 2012. This fee, paid by the Board from plan assets, helps fund research designed to improve patient outcomes. The fee was $2 per covered individual in 2014 and has been indexed in subsequent years based on the increase in national health expenditures.
Individual mandate (members): Beginning January 1, 2014, most Americans are required to have healthcare coverage or pay a penalty. The coverage can be from an employer group health plan, a government program such as Medicare or Medicaid, or individual coverage from an insurance company or the Health Insurance Marketplace. The penalty is the greater of: $95 per uninsured adult or 1 percent of household income in 2014; $325 or 2 percent of household income in 2015; and $695 or 2.5 percent of household income in 2016, and may rise with the national rate of inflation in future years.
Launch of state health insurance marketplaces (employers and members): The ACA requires each state to establish a health insurance marketplace, form or join a coalition with other states to create regional marketplaces, or offer access to a federally facilitated marketplace. The health insurance marketplaces will enable qualified small employers and individuals to purchase qualified healthcare coverage.
Small employers (those with 50 or fewer employees) may purchase coverage for their employees on the state health insurance marketplaces. The cost of coverage from a health insurance marketplace will vary by region and the level of coverage chosen.
For individuals, premiums and cost-sharing obligations (deductibles, copayments, and co-insurance) will be subsidized for those living in households with income less than 400 percent of the federal poverty guidelines (FPL). For a single individual, 400 percent of FPL in 2016 and 2017 is $47,520 and, for a family of four, it is $97,200.
Reduction in waiting periods for Medical Plan enrollment (employers): Beginning January 1, 2014, the ACA sets a limit on waiting periods for enrollment in health plan coverage of 90 days from the date of eligibility for coverage.
Prohibition of annual and lifetime treatment reimbursement limits for essential benefits (members): Starting in 2014, health plans must remove all annual and lifetime dollar limits for essential health benefits — 10 categories of benefits that all plans participating in a health insurance marketplace must cover (e.g., emergency room care, outpatient services, mental health and substance abuse services, prescription drugs, and lab services).
Pre-existing conditions (members): Beginning in 2014, health plans and insurers may no longer deny coverage to anyone who has a pre-existing condition (that is, a medical condition that occurred before the person was enrolled in his or her current health coverage).
Annual limits for out-of-pocket costs (members): Under the ACA, each year the federal government will establish a dollar cap on the out-of-pocket expenses a covered person may incur for essential health benefits provided in network. Once a person reaches the maximum limit, health plans, including the Medical Plan of the PC(USA), must pay 100 percent of allowed charges for medically necessary services. For 2016, the
ACA-prescribed out-of-pocket maximums are
- $6,850 for member-only coverage;
- $13,700 for family coverage.
For 2017, the ACA-prescribed out-of-pocket maximums are $7,150 for member-only coverage and $14,300 for family coverage.
Under the government’s definition, these out-of-pocket costs include doctor visit copays, deductibles, and copayments. (To review your current copayment maximum under the Medical Plan and how it is calculated, see the 2016 Healthcare Deductibles and Copayment Maximums chart in Guide to Your Healthcare Benefits.)
Transitional Reinsurance Program fee (plan sponsors): Sponsors of
self-funded health plans, such as the Board, must pay, from plan assets, a $63 fee per covered individual in 2014 and decreasing annual amounts in 2015 and 2016. The revenue generated by the fee will be used to stabilize premiums in the new Health Insurance Marketplace.
Employer shared responsibility provisions (also known as the employer mandate) (employers): Large employers, with 50 or more full-time employees (or equivalents), must offer full-time employees and their dependent children up to age 26 health insurance coverage that meets certain minimum standards (minimum essential coverage) set by the ACA or else pay a penalty known as the employer shared responsibility payment. All employers will be subject to a reporting requirement through this provision.
To determine if your organization may be a large employer, refer to Preparing for the Employer Mandate: Requirements for Large Employers To Provide Health Coverage and the associated Worksheet To Determine Employee Count.
Coverage reporting by plans (plan sponsors): Under Section 6055 of the Internal Revenue Code, all exchange and employer-sponsored insured plans and self-insured group health plans, including church plans, must report annually to the IRS the names, addresses, and tax identification numbers of the plan members and dependents covered by their qualified health plans. The initial filing was for calendar year 2015 and filed in early 2016. The information will be used by the IRS to monitor compliance with the individual mandate. For more information, watch ACA Reporting Requirements: Who, What, When?
Coverage reporting by large employers (employers): Under Section 6056 of the Internal Revenue Code, large employers subject to the employer mandate will be required to report annually on the number of their full-time employees and the status of their enrollment in employer healthcare coverage during the calendar year. The first report was for calendar year 2015 and must be filed in early 2016, or you will be subject to a penalty. This information will be used by the IRS to monitor compliance with the employer mandate. For more information, watch ACA Reporting Requirements: Who, What, When?
State health insurance marketplaces and large employers (employers): Beginning in 2017, states may permit large employers to participate in the marketplaces. Subsidies are not available to employees who get their health insurance through the marketplaces, but employers may pay a portion of their employees’ premiums to lower their employees’ costs.
Excise tax (plan sponsors): A 40 percent excise tax, also known as the Cadillac tax, takes effect on the “excess benefit” of any employer-sponsored health plan with costs exceeding a certain level (above $10,200, for single-person plans, and $27,500, for family plans, indexed to the CPI-U). Health plan costs are defined by the total cost of premiums, including employer and employee contributions to flexible spending accounts. Standalone dental, disability, and long-term care benefits are not included in the limits under the Cadillac tax rule.