Affordable Care Act (ACA) Changes for 2016

95% Compliant: New Year, New ACA Changes

In December 2015, the IRS extended the deadline for ACA reporting Forms 1094-C and 1095-C, providing some large employers with yet another opportunity to avoid ACA reporting penalties. The extension, however, overshadowed a highly impactful legislative change that became effective on January 1, 2016:

Large employers must offer affordable, minimum value health coverage to 95 percent of their full-time employees and their dependents, or incur penalties.

95% Compliance Threshold

In 2015, the ACA stated that all applicable large employers must offer affordable, minimum-value health coverage to at least 70 percent of their full-time employees and their dependents or face penalties. So while the compliance threshold is not new, as of January 1, 2016, the compliance threshold has increased to 95 percent.

What makes the change significant is that many employers in 2015 struggled to meet the 70 percent minimum or found it difficult to prove such coverage was offered to that population in a timely manner. Employers were faced with many challenges that required new process workflows, revamped data requirements and protocols, data integrity initiatives, and the realization that the data needed is often hosted in separate, disparate systems.

25% More Challenging

The reality is that managing this low margin of error can be a significant administrative burden. Depending on the reporting method an employer uses, the ACA and its mandatory year-end reporting can require monthly data and code assignments based on the offer of minimum essential coverage and all associated variations (i.e., if there was no offer of coverage, or if an offer was made but was not a qualified offer). In addition, a new code standard pertains to the regulations of affordability and how this determination is made on a monthly basis. Without the right technology—and accurate and timely data—this can be a daunting task.

Without a reliable ACA solution in place, employers who manage their benefits information incorrectly may not even realize that they are out of compliance. That is, until the IRS runs their reconciliation process.

Here’s a summary of the significant ACA changes taking place in 2016:


Of all the ACA changes in 2016, the requirement of offering health coverage to all but five percent of the full-time population will likely be the most challenging and the most impactful to employers. If not managed correctly, this could potentially mean millions of dollars in annual penalties for large employers. A reliable and trusted ACA audit and compliance solution can help ensure employers remain compliant by managing data, fulfilling reporting obligations, and helping employers strategically plan benefits for their employee populations.

To gain deeper insight into strategies that can help you cope with the 95 percent compliance threshold, register now to join me at Benefitfocus One Place 2016, where I’ll be hosting a breakout session, 95%: A Study of ACA Compliance Sustainability. You’ll have the opportunity to earn CEU credits and meet with peers who are facing the same ACA challenges as you!