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Know Your Limits – ACA Updates for 2019

Amy Donovan 6/13/2018
Amy Donovan

Though it may seem that very little is happening with health care reform these days, the Feds are still taking care of business by making their annual adjustments to the numbers. This means employers will need to take another look at their employee health plans, rates and employee contributions for the upcoming year.

The Department of Health & Human Services has issued the inflation-adjusted out-of-pocket limits applicable to non-grandfathered plans for plan years beginning in 2019. These out-of-pocket limits apply to in-network services for essential health benefits and include deductibles, co-insurance and co-payments. Note, high-deductible health plans paired with health savings accounts (HSAs) are subject to lower out-of-pocket maximums.

OUT OF POCKET MAXIMUMS AND OTHER LIMITS

The table below shows the 2019 maximums and limits compared to the current amounts:

Non-HSA Qualified Plans 2018 2019
Out-of-Pocket Maximums
   Self-Only $7,350 $7,900
   Family $14,700 $15,800
HSA Qualified Plans 2018 2019
Out-of-Pocket Maximums
   Self-Only $6,650 $6,750
   Family $13,300 $13,500
Contributions
   Self-Only $3,450 $3,500
   Family $6,900 $7,000
Minimum Annual Deductible
   Self-Only $1,350 $1,350
   Family $2,700 $2,700

THRESHOLD TO DETERMINE AFFORDABILITY – EMPLOYER MANDATE

The Internal Revenue Service also announced the 2019 percentage threshold for determining if coverage is affordable under the Employer Mandate. Coverage is affordable if an employee’s required contribution for the employer’s lowest cost self-only coverage that provides minimum value does not exceed 9.5 percent (indexed annually) of the employee’s household income. For 2018, the threshold is 9.56 percent. For plan years beginning in 2019, the percentage increases to 9.86 percent.

Employers subject to the Employer Mandate continue to have the same three safe harbors for determining whether coverage is affordable for an employee:

  1. Form W-2 Safe Harbor (based on the employee’s W-2, Box 1 reported wages for that year)
  2. Rate of Pay Safe Harbor (based on an employee’s hourly rate times 130 hours per calendar month)
  3. Federal Poverty Line Safe Harbor (based on the annual federal poverty line for a single individual divided by 12).

More details about these affordability safe harbors and application of these guidelines are discussed in one of our previous Briefings available on our web site.

It’s time to get ahead of these details because enrollment for 2019 coverage is just around the corner!