As the human and economic costs of COVID-19 continue to mount, reinsurers are working with healthcare executives on how to mitigate the impacts of the virus on the sector. The (re)insurance industry, policyholders and governments throughout the world must come together on an approach that offers relief to those who need it now and develop a plan to implement mitigation strategies and a response mechanism for future pandemic events.
Amid the twin health and economic crises caused by the COVID-19 pandemic, employers face unprecedented challenges in managing health and leave benefit offerings, contribution strategies, vendor terms, plan operations, future financial outlook and employee communications. These challenges, along with public health and political uncertainties, make planning for 2021 more complicated than ever. To help ensure that compliance issues don’t get lost in the shuffle, Mercer's Law and Policy Group has summarized the top 10 developments to address or monitor when planning group health benefits and paid leave programs for the upcoming year.
The article starts with the Affordable Care Act's (ACA) affordability limit for 2021, since it was recently released by the Internal Revenue Service (IRS). For the 2021 plan year, employer-sponsored health coverage will meet the Affordable Care Act’s affordability standards if the required employee contribution doesn't exceed 9.83 percent of household income (up from 9.78 percent in 2020).
For calendar-year plans using the federal poverty line (FPL) affordability safe harbor, the monthly employee required contribution for the lowest-cost, self-only option with minimum value cannot exceed USD 104.53 (up from USD 101.79 in 2020). As a reminder, this affordability percentage can affect individuals' eligibility for federally subsidized coverage from a public exchange, as well as employers' potential liability for shared-responsibility (or "play or pay") assessments. To determine liability for play-or-pay assessments, three employer safe harbors allow replacing household income in the affordability calculation with one of these figures: Form W-2 wages, rate of pay, and FPL.
The COVID-19 pandemic is a public health emergency and at Guy Carpenter we feel the gravity of our role in helping clients respond to the insurance implications for their businesses and customers.