In a recent episode of Williams Mullen’s Benefits Companion podcast, host Brydon DeWitt addressed important changes for employers to consider in light of the Affordable Care Act (ACA) benchmark. Specifically, the benchmark in determining the affordability of employer-sponsored health coverage is set to drop significantly by 2024. DeWitt offered insights into how employers can stay compliant and maintain health plan affordability amongst these impending changes.
The ACA requires employers to offer affordable health coverage to their employees. This ‘affordability threshold,’ determined by the IRS, considers both the employee’s household income and the lowest-cost, self-only coverage that meets the ACA’s minimum value requirements. Any alteration to the affordability threshold can potentially jeopardize the coverage of some employees.
As described by DeWitt, when the affordability threshold drops in 2024, it could lead to sizable difficulties for employers striving to offer health coverage while also adhering to ACA regulations. The crux of the issue lies in the balancing act between cost to employee and cost to employer. Employers face the challenge of staying compliant with ACA regulations, while still keeping health coverage affordable for their employees.
Compliance with the ACA affordability rules is not merely a matter of avoiding penalties. It is a component of good corporate governance and an invaluable element of employer-employee trust. Amid these challenges, staying well-informed of these changes and prepared for their impacts can result in effective management of risks, and ultimately, maintaining quality, affordable health plans for employees.