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Businesses with 50 or more FTE employees

What you need to know and do to prepare for benefits open enrollment season

Benefits requirements

For employers with 50 or more FTEs, major medical insurance must be offered to all full-time employees and their dependents. This includes employees who work 30 hours of service or more per week and their dependents up to age 26. Hours of service include hours worked and hours that an employee is paid but does not work, such as vacation, holiday, illness or disability, jury duty and military duty.

When it comes to benefits requirements, keep the following in mind:

  • Affordability

    The employee portion of the premium for self-only coverage must be less than 9.5 percent of the employee’s W-2 income.

  • Minimum value requirements

    The health plan must cover at least 60 percent of the total allowed cost of benefits.

  • Required communication

    Employers are required to provide notice about health insurance marketplaces to all new employees within 14 days of hire. Learn more

  • Benefits waiting periods

    Keep enrollment waiting periods to 90 days or less.

  • Summary of benefits and coverage

    If your company offers major medical insurance benefits to its workforce, a summary of benefits and coverage must be provided to all major medical insurance applicants and enrollees before benefits enrollment or re-enrollment. The SBC must provide an accurate description of the benefits and coverage under the applicable plan or coverage.

  • Keep track

    Employers are responsible for keeping detailed records of employment status and hours worked by their employees. Tracking involves important details for full- and part-time employees issued by the federal government, including measurement periods and reassessment.

  • COBRA notifications

    If your company offers a group health plan, exiting employees must receive a COBRA notification that includes information about health insurance marketplaces. Learn more

Out-of-pocket and contribution limits for 2017

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Out-of-pocket limits for ACA compliant plans:

$7,150 – individual coverage
$14,300 – family coverage

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Out-of-pocket limits for high-deductible health plan:

$6,550 – individual coverage (no change from 2016)
$13,100 – family coverage

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Health savings account contribution limits:*

$3,400 – individual
$6,750 – family

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High-deductible health plan minimum deductibles:

$1,300 – individual coverage
$2,600 – family coverage

*Catch-up contributions up to $1,000 can be made any time during the year in which the health savings account participant turns 55.


If your company doesn’t offer Affordable Care Act compliant health care coverage that meets the affordable and minimum-value standards to all full-time employees and their dependent children under the age of 26, it’s important to prepare for the potential amount your company may be fined.

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To activate a shared-responsibility penalty, both triggers must occur:

  • Trigger 1: (at least one of these is true for your company):
    1. Your company doesn’t offer health care coverage to 95 percent of all full-time employees and their dependent children.
    2. Your company offers coverage that isn’t considered affordable.
    3. Your company offers coverage that doesn’t meet minimum value standards.
  • Trigger 2: At least one employee or their dependent child receives a subsidy through a federal or state insurance exchange to help offset the cost of purchasing health care coverage.

Penalties are as follows:

  • $2,000 penalty per full-time employee - If an employer doesn’t offer any type of health care coverage to all of its full-time employees and their dependents, the employer is penalized a fee of $2,000 for each of its full-time employees, excluding the first 30, if at least one of their full-time employees qualifies for and receives a premium subsidy in the individual insurance market through a federal or state exchange.
  • $3,000 penalty per full-time employee or dependent receiving a subsidy - If an employer offers coverage that is either unaffordable or doesn’t meet minimum value requirements, the employer is penalized $3,000 only for each full-time employee or dependent who purchases health care coverage in the individual market through a federal or state exchange and receives a premium subsidy.

The Cadillac tax

The Cadillac tax, scheduled to take effect in 2020, is equivalent to 40 percent of the cost of health coverage beyond a certain threshold, depending on the type of plan. It’s important to wait for further guidance as 2020 draws near – including the tax threshold amounts and other implementation details.

Anatomy of the Cadillac Tax Cadillac Tax FAQ
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How Aflac can help

Aflac is not major medical insurance. Aflac insurance policies don’t replace comprehensive health insurance coverage. These benefits are considered HIPAA excepted benefits, which are excluded from most of the ACA’s market reforms. Because of this, having voluntary benefits options is a smart way for businesses to enhance their employee-benefits packages.

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  • Aflac is for specified injuries, illnesses or disabilities. For example: a broken arm, heart attack or hospital stay. Relevant policies include supplemental life, disability, critical illness, hospital, accident, cancer insurance and much more. These benefits pay cash to help cover bills and out-of-pocket costs not covered by major medical insurance.
    • Aflac helps cover out-of-pocket costs that major medical insurance was never designed to cover. Even with major medical insurance, potential out-of-pocket costs associated with illness or injury can be considerably high. Aflac cash benefits can be used to help with everyday living expenses such as rent/monthly mortgage, utilities, groceries, child care, or out-of-pocket medical expenses. When policyholders are sick or hurt, Aflac pays them cash benefits to use however they want so they can focus on recovery, not financial stress.

Make Aflac part of your benefits package today. Contact your agent or contact Aflac today.