Indexed Calculation for Determining Tax Credits and Affordability of Employer Sponsored Coverage
The IRS released information indexing the percentages used to determine tax credits for plan years beginning in 2017. In addition, they released the employer contribution percentage for 2017 as being 9.69%. This is the percentage that will be used by the Exchanges to determine whether or not employer coverage is offered to an employee at an affordable cost. This notice also indicates that 9.69% can also be used by employers for determining affordability for employee-only, minimum value coverage under the employer mandate.
New SBC Template
The DOL also released the latest SBC template. Some of the key changes include an indicator for both minimum essential coverage (MEC) and minimum value. Contrary to the current template, the minimum value indicator also now informs the individual that a plan offering that does not meet minimum value may make them eligible for a tax credit. The MEC indicator informs individuals that they may own a payment for not having at least MEC. Another distinction is that the update template includes one additional example of the cost of an emergency room visit.
The updated templates must be used for plan years starting on or after 4/1/2017. Until that time, either the current or new template will be considered compliant.
Please contact your Assurance representative with any questions or concerns.