ACA 2016 Cost Of Living Adjustments

 In Blog, Health Care Reform

The IRS has recently released the Affordable Care Act (ACA) 2016 Cost of Living Adjustments (Cola) under various provisions of the Internal Revenue Code. These provisions could affect your company benefit plans.

Health Savings Accounts

For the Calendar year 2016, the limitation on deductions for an individual with self only coverage under a high deductible health plan is $3,350. For a family, the deduction is $6,750. For more information about How health savings accounts work, their pros and cons, see this blog post: HSA Contribution Limits

High Deductible Health Plans

For calendar year 2016, a high deductible health plan is defined by the IRS as a health plan with an annual deductible that is not less than $1,300 for individuals and $2,600 for families. The annual out of pocket expenses (deductibles, co-payments and other amounts, but not including premiums) can not exceed $6,550 for Individuals and $13,100 for families.

With a high deductible health plan, you would be responsible to pay $1,300 (Individual deductible), $2600 (family) for any medical expenses you incur before the insurance company picks up part of or all (co-insurance) of the remaining cost. The most you will pay out of pocket for your medical expenses would be $6550 or $13,100.

Catch-Up Contributions

Individuals who are 55 or older and are covered by a high deductible plan may make additional “catch up” contributions of $1,000 each year until they enroll in Medicare.

Cafeteria Plans

ACA also amended section 125 to place a $2,550 limit on voluntary employee salary contributions to Flexible Health Spending Accounts.

Qualified Transportation Fringe Benefits

For Calendar year 2016, the monthly limitation for transportation in a commuter highway and/or a transit pass remains unchanged at $130.00. The monthly exclusion limitation for qualified parking expenses increased to $255.00

Highly Compensated Employees

The compensation threshold for highly compensated individuals remains unchanged at $120,000

Key Employees

The dollar limitation concerning the definition of a key employee for 2016 remains unchanged at $170,000

If you have any questions about these changes and how they might affect your company benefit plans, call our office at: 914-633-1717

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