Affordable Care Act (ACA): Limits, Fees and Penalties Through 2021

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The Affordable Care Act (ACA) contains a number of limits and penalties that apply to employers.

Staying on top of the requirements can be a challenge. Our team of compliance experts has put together a guide of the important provisions employers need to stay on top of to ensure organizational compliance.

Employer Shared Responsibility (employer mandate) – requirement that applicable large employers (ALEs) offer affordable, minimum value coverage to substantially all full-time employees and their dependents

• Affordability—an offer is affordable if the employee’s contribution, toward the employee-only rate, does not exceed a certain percent of their compensation. Employers use one of the three allowable safe harbor compensation methods to determine affordability, e.g. W-2, rate of pay, or federal poverty line (FPL).

• Penalties—for failure to comply with the Employer Shared Responsibility provision
  • • Tier 1 – Failure to offer to substantially all full-time employees
    • Tier 2 – Failure to provide coverage that is affordable or meets minimum value (plan reimburses at least 60% of the cost of essential health benefits)

   
  *Projected Amounts

  Employer Mandate Penalties— Calendar Year	2021	2020	2019	2018	2017	2016	2015	2014
  Tier one— Failure to offer coverage or to offer to 95% of employees (70% for 2015)	$2,700	$2,570	$2,500	$2,320	$2,260	$2,160	$2,080	$2,000
  Tier two— Failure to offer coverage that is affordable and meets minimum value	$4,060	$3,860	$3,750	$3,480	$3,390	$3,240	$3,120	$3,000

  Market Rules

  • • • Flexible Spending Accounts—the maximum amount of annual pretax dollars employees may put aside through payroll deduction to pay for qualified medical expenses
      • Health Savings Account (HSA)—an employee-owned bank account coupled with a qualified high deductible plan

  Listed below are the new limits, fees, and penalties for 2021, along with historical perspective.

  Account Limits	2021	2020	2019	2018	2017	2016	2015	2014
  Health Care Flexible Spending Account (FSA)	$2,750	$2,750	$2,700	$2,650	$2,600	$2,550	$2,550	$2,500
  Dependent Care Flexible Spending Account (FSA)	$5,000	$5,000	$5,000	$5,000	$5,000	$5,000	$5,000	$5,000
  Affordable Care Act (ACA)
  Annual Out-of-Pocket Maximums	Self-only: $8,550 Family: $17,100	Self-only: $8,150 Family: $16,300	Self-only: $7,900 Family: $15,800	Self-only: $7,350 Family: $14,700	Self-only: $7,150 Family: $14,300	Self-only: $6,850 Family: $13,700	Self-only: $6,600 Family: $13,200	Self-only: $6,350 Family: $12,700
  Health Spending Accounts (HSA)
  High Deductible Health Plan
  Annual Deductible Minimums	Self-only: $1,400 Family: $2,800	Self-only: $1,400 Family: $2,800	Self-only: $1,350 Family: $2,700	Self-only: $1,350 Family: $2,700	Self-only: $1,300 Family: $2,600	Self-only: $1,300 Family: $2,600	Self-only: $1,300 Family: $2,600	Self-only: $1,250 Family: $2,500
  Annual Out-of-Pocket Maximums	Self-only: $7,000 Family: $14,000	Self-only: $6,900 Family: $13,800	Self-only: $6,750 Family: $13,500	Self-only: $6,650 Family: $13,300	Self-only: $6,550 Family: $13,100	Self-only: $6,550 Family: $13,100	Self-only: $6,450 Family: $12,900	Self-only: $6,350 Family: $12,700
  Health Spending Account (HSA)—Maximum Contribution
  Maximum Contribution	Self-only: $3,600 Family: $7,200	Self-only: $3,550 Family: $7,100	Self-only: $3,500 Family: $7,000	Self-only: $3,450 Family: $6,850/$6,900	Self-only: $3,400 Family: $6,750	Self-only: $3,350 Family: $6,750	Self-only: $3,350 Family: $6,650	Self-only: $3,330 Family: $6,550
  Transportation Fringe Benefits
  Parking Mass transit	n/a	n/a	$265/mo $265/mo	$260/mo $260/mo	$255/mo $255/mo	$255/mo $255/mo	$250/mo $250/mo	$255/mo $130/mo

  Fees—Paid by Health Plan—per covered life	2021	2020	2019	2018	2017	2016	2015	2014
  Transitional Reinsurance Fee	n/a	n/a	n/a	n/a	n/a	$0	$27	$44
  Patient-Centered Outcomes Research (PCORI)
  Plan years ending 1/1 - 9/30	TBD	TBD	$2.54	$2.49	$2.39	$2.26	$2.17	$2.08
  Plan years ending 10/1 - 12/31	TBD	TBD	TBD	$2.54	$2.45	$2.39	$2.26	$2.17

  Click here to download Affordable Care Act (ACA): Limits, Fees and Penalties through 2021