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The latest open enrollment period report for the 2019 plan year from the Centers for Medicare and Medicaid Services’ (CMS) shows that the Affordable Care Act marketplace is actually stabilizing, despite the removal of the ACA’s Individual Mandate penalty starting this year.
The 2019 Exchange Open Enrollment Period Final Report issued by CMS found that the average total premiums for plans dropped by 1.5%, the first decline since 2014 when the exchanges first opened. All of this despite a modest drop in enrollees from roughly 11.8 million in 2018 to 11.4 million in 2019.
Despite a reduction in enrollees, insurance premiums for the marketplace actually fell. The concern had been that with fewer enrollees, the cost of medical premiums would rise. The report attributes another reason for the drop-off in enrollees to a growing economy. With a growing economy, more people are employed and are electing to enroll in employer-sponsored health coverage in lieu of the exchanges.
For employers, it’s great news to be adding employees that can help their businesses grow. However, hiring more employees also means that employers need to be on top of providing the necessary health insurance coverage required by the ACA. Under the ACA’s Employer Mandate, Applicable Large Employers (ALEs), employers with 50 or more full-time employees and full-time equivalent employees, are required to offer Minimum Essential Coverage (MEC) to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value (MV) and is Affordable for the employee or be subject to IRS 4980H penalties.
Meanwhile, Democrats in the U.S. House of Representatives are moving forward on proposed legislation that would restore certain regulations and funding to pay for outreach to citizens seeking help to navigate the government health exchanges. According to Vox, the legislative bills under consideration focus on reversing executive actions by the Trump administration to weaken the law, including the expansion of the use of short-term duration insurance plans with fewer benefits and no coverage of pre-existing conditions and cuts to funding used for outreach to Americans who need help navigating government health exchanges.
The takeaway here? Don’t count on the ACA or its Employer Mandate going away anytime soon.
As employers add employees and expand, they should be sure they understand whether they now qualify as an ALE or if they are at increased risk of receiving ACA penalties issued by the IRS. Employers should consider undertaking an ACA Penalty Risk Assessment to learn if they will be deemed ALEs and are at risk of receiving ACA penalties from the IRS. Some outside experts may offer to undertake this assessment at no cost to employers. Such a review can reap dividends by helping organizations avoid significant IRS ACA penalties.
