The 2019 ACA and HSA Inflation Adjustment Indexing
Earlier this year the IRS announced its 2019 inflation adjustment indexing for a number of ACA provisions such as the employer shared-responsibility penalty, affordability percentage (employee contribution limit that determines employer penalty), and Maximum out of pocket limits.
The two shared-responsibility penalties are for when employers fail to meet the minimum essential coverage (4980H(a)) and minimum value and affordability (4980H(b)). The section 4980H(a) penalty may be assessed when an ALE (applicable large employer) does not offer minimum essential coverage to at least 95 percent of its full-time employees, and at least one full-time employee receives a premium tax credit. The section 4980H(b) penalty may be assessed if an ALE offers minimum essential coverage to at least 95 percent of its full-time employees, but at least one full-time employee receives a premium tax credit because the coverage offered was not considered affordable and/or did not provide minimum value.
Employers need to make sure that they don’t overlook the adjusted ACA cost sharing limits as they could face sharp penalties under the ACA’s shared responsibility provisions. In addition to the ACA adjusted index, the IRS released the 2019 HSA inflation adjusted contribution limits as well: