Navigating ACA Premium Changes in 2024: A Guide for Employers
In 2024, employers who provide group health insurance are facing new challenges under the Affordable Care Act (ACA). Understanding these changes is key to ensuring compliance and managing healthcare costs effectively. Here's an overview of what employers need to know about the ACA premium requirements changes.
Understanding the Affordability Percentage Adjustment
The ACA's Affordability Percentage has decreased from 9.12% to 8.39% of household income. This change, based on the federal poverty level set by the Department of Health and Human Services (HHS), necessitates an increase in the employer's contribution to health insurance premiums for their employees.
This means that for employee-only coverage, the premium cost cannot exceed 8.39% of an employee's household income, leading to an increased financial responsibility for employers. The goal is to make health insurance more affordable for employees, but it requires careful planning and adjustment from employers.
Navigating Tax Credits and Employer Liability
A critical aspect of ACA compliance involves understanding tax credits. Employees offered affordable coverage by their employers are ineligible for tax credits. If an employee qualifies for a tax credit while on an employer-sponsored group health plan, the employer could face significant fines for non-compliance.
Employers working with commercial carriers will find these carriers are responsible for calculating compliant premium amounts. Self-insured employers will bear more administrative responsibilities to ensure compliance.
Preparing for Compliance
Employers must ensure their health insurance offerings meet the new standards. Collaborating with insurance carriers, adjusting health plans, and thoroughly understanding the new affordability criteria are essential steps.
Effective communication with employees about these changes is also crucial. Keeping your team informed helps them understand the impact of these adjustments on their health insurance and overall benefits.
How VBS Can Help
At Virtual Business Solutions, we specialize in helping businesses navigate the complexities of healthcare legislation and HR compliance. Our team is equipped to guide you through these ACA changes, ensuring your health plans are compliant and your business remains in good standing.
For more insights and assistance with your ACA compliance and HR needs, visit our HR Compliance Services page on the VBS website. Our expertise in HR legislation and health insurance ensures you have the support you need to adapt to these changes efficiently and confidently.
If you have any questions or need assistance in preparing for these ACA changes, please contact us. At VBS, we're committed to providing solutions that cater to your unique business needs and help you thrive in a dynamic regulatory environment.