A proposed rule was released on the Affordable Care Act’s (ACA) minimum value and affordability rules. An employer’s health plan provides minimum value if the plan’s share of total allowed costs of benefits provided under the plan is no less than 60 percent. An employer’s health plan is considered affordable if an employee’s contribution for self-only coverage does not exceed 9.5 percent of income.
The proposed rule includes special provisions for determining how HRA and HSA contributions and wellness program incentives are counted when determining minimum value and affordability. Under the proposal, employer HSA contributions for the current plan year are only taken into account for minimum value. Since HSAs generally cannot be used to pay health insurance premiums, these amounts are not used for affordability.
Amounts newly made available under an HRA for the current plan year are used for minimum value if they may only be used for cost-sharing. If the HRA amounts can be used for paying insurance premiums, they are used for affordability and not minimum value.
In general, minimum value and affordability are determined by assuming that every eligible individual fails to satisfy a wellness program’s requirements, unless the wellness program is related to tobacco use. For tobacco wellness programs, employers may assume that every eligible individual receives the incentive.
Under a transition rule for qualifying wellness programs in place on May 3, 2013, if a health plan would provide minimum value or be affordable with the wellness incentive included, the employer can avoid a penalty for the 2014 plan year.
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