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1st Quarter 2021


We’re here to help you stay on top of the impact of health reform. With Health Reform Today we'll keep you up to date on the latest news. Here are some topics we are following.

The Biden Administration’s American Rescue Plan expands access to healthcare coverage to millions of Americans and includes a new COBRA coverage subsidy. The American Rescue Plan Act provides fully subsidized COBRA premiums. This new revision allows employers to reduce an employee’s premium to zero in anticipation of a credit and will reduce an employer’s ACA penalty risk.

In the past year, many employers reduced employee’s hours to contain costs, which would regularly put you at a greater risk for Penalty B if the cost of COBRA exceeds ACA affordability limits. However, from April 1 to September 30, 2021, COBRA premiums will not be charged to employees, and will be recouped by the applicable entity through a tax credit.

In this blog we will take a close look at the implications this law may have on your business.

The American Rescue Plan is the most sweeping health reform legislation since the passage of the Affordable Care Act (ACA) 10 years ago. The $1.9 trillion pandemic stimulus package supports healthcare affordability and increases marketplace access for millions of Americans.

While this may be welcome news to many struggling Americans, employers need to understand the possible financial implications this legislation poses to them, for inside the American Rescue Plan lies health insurance coverage provisions that could place employers at greater risk of incurring IRS penalties for non-compliance with the ACA.

It’s already April and if you aren’t feeling confident with your ACA compliance and current solution, it’s time to act.

Under Penalty A, your company could be assessed failure to offer minimum essential coverage to substantially all full-time employees. Or under Penalty B, you could be assessed failure to offer affordable coverage that meets minimum value requirements to its ACA eligible full-time employees.

These penalties compound over time and can cost your company millions. We will break down the calculation for penalties A and B as well as give you the keys to avoiding these financial risks. Learn more about Penalty A and B here.

The Affordable Care Act (ACA) requires that your employees’ required contribution for self-only coverage must be no more than 9.83 percent of their household income. Because an employer typically would not know the household income of an employee, the ACA has provided safe harbors that can be used in lieu of household income to determine affordability.

There are three safe harbor options, each of which require different information to determine affordability.

  • Federal poverty level
  • Rate of pay
  • Form W-2, Box 1

Continue reading this blog to make sure you understand the Safe Harbor options your company can utilize.

PCORI fees were originally slated to end this year, but the Further Consolidated Appropriations Act of 2020 signed by the Trump Administration extended the fees for Insurers and Employers with self-funded plans through September 30, 2029 (or 2030 depending on plan year end date).

The 2021 fee for self-funded plan sponsors is quickly approaching with a due date of July 31, 2021. There are three different PCORI calculation methods, in this article we will walk through each of them.

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