Healthcare reform and its effects on employers, employees and the payroll software and services field have been a matter of much discussion – and confusion – over the past few years. Adding the confusion is speculation over just how President Trump’s repeal-and-replace effort ultimately will impact the Obama administration’s Affordable Care Act. Though “Obamacare”, as it’s widely known, has not yet been repealed or replaced but multiple elements have changed. Here’s what you and your payroll clients need to know about what’s new and what remains the same for 2019 open enrollment.
What remains the same?
The annual open enrollment period for individual health insurance plans runs from November 1 through December 15. Since some state-based exchanges extended their open enrollment periods for 2018, it’s expected that some will do the same for 2019, so be sure to check with all states in which your payroll clients operate.
All of the state-based and federally facilitated exchanges established under the ACA and known as the Health Insurance Marketplace remain in operation, allowing employees to shop major medical insurance plans and apply for income-based subsidies. Off-exchange individual medical plans also are available, but remain ineligible for ACA subsidies.
One issue that your payroll clients and their employees are sure to question is the individual mandate to secure and maintain minimum essential coverage throughout the year. While the mandate remains in place for the foreseeable future, what’s changed is the associated tax penalty for foregoing coverage. Legislation passed in December 2017 did away with that penalty, but won’t take effect until January 1, 2019.
This means that employees who didn’t have health insurance in 2018 likely will face a fine when they file their taxes early next year. Depending upon an employee’s healthcare needs and financial situations, he or she can choose an Obamacare can or opt for alternative coverage such as a hospital plan or short-term coverage plan without owing a tax penalty for 2019. Note that those with pre-existing conditions may be ineligible for alternative plans, so your payroll clients will want to encourage employees to consider major medical insurance policies instead.
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