Understanding Changes to ACA for 2024
The Affordable Care Act (ACA) made a number of reforms to group health plan coverage when it was enacted in 2010. Since then, changes have been made to various ACA requirements, such as annual cost-of-living increases to certain ACA dollar limits, extensions to ACA reporting deadlines, and updates to preventive care coverage guidelines.
Changes to some ACA requirements will take effect in 2024 for employers sponsoring group health plans. Most notably among these is the affordability percentage under the ACA’s employer mandate rules for applicable large employers (ALEs),which will be at its lowest point, requiring many ALEs to lower their employee contribution rates.
The following plan design requirements have changed for 2024:
Limits on cost sharing for essential health benefits.
Coverage affordability percentage under the employer mandate rules.
Dollar amounts for calculating penalties under the employer mandate rules.
Additional considerations when planning for other major plan design changes include:
Confirm that your plan’s out-of-pocket limit for essential health benefits (EHB) does not exceed the ACA’s limit for the plan year beginning in 2024.
If you have a health FSA, confirm that its dollar limit on employees’ salary reduction contributions will not exceed the adjusted limit for the plan year beginning in 2024.
If you have a health FSA that allows carryovers of unused amounts, confirm that the maximum unused amount from a plan year starting in 2024 (that is allowed to be carried over to the immediately following plan year beginning in 2025) does not exceed the adjusted limit.
Confirm that your health plan covers the latest recommended preventive care services without imposing any cost sharing.
If you offer an excepted benefit HRA, confirm that its maximum benefit amount for the plan year beginning in 2024 does not exceed $2,100.
If you have a grandfathered plan, determine whether it will maintain its grandfathered status for the 2024 plan year.
Will you be an ALE for 2024?
Employers should review these ACA requirements and develop a compliance strategy, ensuring that their health plan documents, including the summary of benefits and coverage (SBC), are updated to reflect any new plan limits, and that up-to-date information is communicated to employees at open enrollment time.
Of course, the law is much more complex than can be provided in an overview like this. Contact the Benefits professionals at The Reschini Group for a more complete explanation and to get informed guidance on how your organization needs to prepare for changes to the ACA in 2024.
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