Affordable Care Act Mid-year Check-in

Requirements around the Affordable Care Act (ACA) are seemingly ever-changing and keeping up to date can be a challenge. So far, 2023 has stayed true to this form. In the first half of the year, we have seen big changes to penalties, small business filing regulations, and a ruling, that if it stands, could lead to millions of people having to pay more for certain preventive care. With so much happening, it can be easy to miss something. Catch up below on what has happened in the last six months with ACA in our 2023 mid-year check-in.

ACA Preventive Care Mandates - What We Know Right Now

On March 30, 2023, U.S. District Judge Reed O’Connor ruled that preventive care recommendations made by the U.S. Preventive Services Task Force (USPSTF) no longer needed to be covered nationwide by private health insurers at zero cost to patients.

 This ruling applied specifically to preventive services recommended by the USPSTF with an “A” or “B” rating that were made after the Affordable Care Act (ACA) was enacted in 2010.

Some examples of the affected preventive screenings are:

• Screening for anxiety for children aged 8 to 18 years 
• Screening for colorectal cancer in adults aged 45 to 49 years
• Medications to reduce the risk of breast cancer for women at increased risk aged 35+

A full list of the “A” and “B” rated USPSTF recommendations is available here. 

The Department of Health and Human Services (HHS) has appealed this ruling.

On May 15th, a federal appeals court put this ruling on hold, and on June 12th, an agreement was made between the Biden administration and the businesses and individuals who sued to remove the preventive care mandate for a broad stay nationwide. This will temporarily keep the requirement for this preventive care to be covered throughout the appeal process. 

 This means that, for now, and certainly if this deal is made, no-cost coverage for the preventive services qualified above is still required under law.

 The Department of Health and Human Services (HHS) has filed a notice of appeal and, at the end of this process, Judge O’Connor’s ruling could potentially be overturned in the future or maintained. With this in mind, making significant benefit plan and pricing changes may be premature until this is resolved.

New Electronic Filing Rules for Small Businesses

While organizations were in the midst of filing returns this year, the IRS made a change that could have a big impact on how smaller businesses file information returns in 2024.

 On February 23, 2023, a final rule (TD 9972) was passed, expanding the requirement to file certain information returns electronically, including Affordable Care Act (ACA) returns. In an effort to modernize its return-filing process and work towards the elimination of paper filing, the IRS is lowering the 250-return threshold for mandatory electronic reporting to 10 for returns due in 2024 or later years. Thankfully, the electronic-filing threshold for returns required to be filed in 2023 remains at 250. But beginning in the 2024 reporting season, if an employer has more than 10 forms to file, they must be filed to the IRS electronically.

Additionally, this rule will require employers to aggregate the number of different returns they file when determining  whether the 10-return threshold is reached. Whereas the previous 250-return threshold applied separately to each type of information return, the new rule aggregates your returns across forms, including information returns (ie. Forms W-2, 1099 and 1095), income tax returns, employment tax returns, and excise tax returns. If your aggregated number of forms equals more than 10, you will have to file electronically.

So, starting in 2024, it appears that only the smallest of small businesses may have the option to file on paper.

To learn more about this new rule, read our blog “Big Changes to ACA Electronic Filing Rules for Small Businesses”.

Cost of ACA Employer Mandate Penalties to Rise in 2024

The world of ACA is certainly a fluid one. Since its inception in March 2010, regulations have evolved, and penalties have steadily risen year over year. In March 2023, the IRS announced that 4980H employer mandate penalties for non-compliant applicable large employers (ALEs) for 2024 are rising again. Here’s a recap:

• Penalty A—failure to offer minimum essential coverage to 95% of full-time, benefit eligible employees—will increase from $2,880 ($240/month) in 2023 to $2,970 ($247.50/month) in 2024 .
• Penalty B—failure to provide affordable, minimum value coverage to a benefit eligible employee—will increase from $4,320 ($360/month) in 2023 to $4,460 ($371.67/month) in 2024 .

These new penalty amounts will be effective beginning with the 2024 tax year.

The rising costs of noncompliance should serve as a further incentive for employers to examine their group health plan offerings to help ensure broad enough coverage to full-time employees with at least one self-only option that is affordable and provides minimum value benefits.

On-Demand Webinar

With so much happening in the ACA space during the first half of 2023, we are on guard for additional developments as the year goes on. With states implementing their own ACA regulations in addition to the federal regulations, meeting requirements is getting more challenging, the IRS is getting more strict, and the chance of penalties is getting more real. To learn more about the above changes, help stay on top of new ACA developments, and ask your burning ACA questions, view our on-demand webinar, Understanding the Affordable Care Act - How to Better Navigate ACA Regulatory Pitfalls and Increased Penalties.

View Webinar!