The IRS issued recent Affordable Care Act (ACA), also known as Obamacare, guidance in the forms of the 2019 affordability percentage and assistance with Letters 227.
The ACA affordability percentage will increase from 9.56% in 2018 to 9.86% in 2019, which should allow employers to increase employee contributions. When preparing for 2019 open enrollment, employers (who are subject to the ACA Employer Mandate) must set the employee contribution for single coverage to no more than 9.86% of income to avoid potential ACA penalties.
View IRS announcement in Revenue Procedure 2018-34 and read our ACA bulletin for more information.
In other ACA news, the IRS updated their website with additional guidance for employers who receive a Letter 227. The IRS sends 227 letters to employers who may be assessed a penalty under the Employer Mandate. There are five versions of the 227 letters used during the penalty assessment process. Employers who receive a Letter 227 must review and respond expediently. To be prepared, check out the IRS website.
If you have questions about how the ACA and potential penalties may apply to you and your health plan, please contact an S.S. Nesbitt benefits consultant.