ISSUED 11/09/20
The Affordable Care Act (ACA) contains a number of limits and penalties that apply to employers. These include the following provisions:
• Employer Shared Responsibility (employer mandate) – requirement that applicable large employers (ALEs)
offer affordable, minimum value coverage to substantially all full-time employees and their dependents
• Affordability – an offer is affordable if the employee’s contribution, toward the employee-only rate, does not exceed a certain percentage of their compensation. Employers use one of the three allowable safe harbor compensation methods to determine affordability, e.g. W-2, rate of pay, or federal poverty line (FPL).
Plan Years | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 |
Affordability Safe Harbor Percentages | 9.83% | 9.78% | 9.86% | 9.56% | 9.69% | 9.66% | 9.56% | 9.50% |
• Penalties - for failure to comply with the Employer Shared Responsibility provision
• Tier 1 - Failure to offer to substantially all full-time employees
• Tier 2 – Failure to provide coverage that is affordable or meets minimum value (plan reimburses at
least 60% of the cost of essential health benefits)
*Projected amounts*
Employer Mandate Penalties – Calendar year | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 |
Tier one – Failure to offer coverage or to offer to 95% of employees (70% for 2015) | $2,700 | $2,570 | $2,500 | $2,320 | $2,260 | $2,160 | $2,080 | $2,000 |
Tier two – Failure to offer coverage that is affordable and meets minimum value | $4,060 | $3,860 | $3,750 | $3,480 | $3,390 | $3,240 | $3,120 | $3,000 |
Market Rules
• Flexible Spending Accounts – the maximum amount of annual pretax dollars employees may put aside
through payroll deduction to pay for qualified medical expenses
• Health Spending Account (HSA) – an employee-owned bank account coupled with a qualified high
deductible plan
Listed below are the new limits, fees, and penalties for 2021, along with a historical perspective.
Account Limits | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | Health Care | $2,750 | $2,750 | $2,700 | $2,650 | $2,600 | $2,550 | $2,550 | $2,500 | Flexible Spending | Account (FSA) | Dependent Care | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | Flexible Spending | Account (FSA) | Affordable Care Act (ACA) | | Self-only: | Self-only: | Self-only: | Self-only: | Self-only: | Self-only: | Self-only: | Self-only: | Annual Out-of- | $8,500 | $8,150 | $7,900 | $7,350 | $7,150 | $6,850 | $6,600 | $6,350 | Pocket Maximums | Family: | Family: | Family: | Family: | Family: | Family: | Family: | Family: | | $17,100 | $16,300 | $15,800 | $14,700 | $14,300 | $13,700 | $13,200 | $12,700 | Health Spending | | | | | | | | | Accounts (HSA) – High deductible health plan | Self-only: | Self-only: | Self-only: | Self-only: | Self-only: | Self-only: | Self-only: | Self-only: | Annual | $1,400 | $1,400 | $1,350 | $1,350 | $1,300 | $1,300 | $1,300 | $1,250 | deductible | Family: | Family: | Family: | Family: | Family: | Family: | Family: | Family: | minimums | $2,800 | $2,800 | $2,700 | $2,700 | $2,600 | $2,600 | $2,600 | $2,500 | Annual out-of-pocket | Self-only: | Self-only: | Self-only: | Self-only: | Self-only: | Self-only: | Self-only: | Self-only: | | | | | | | | | | | $7,000 | $6,900 | $6,750 | $6,650 | $6,550 | $6,550 | $6,450 | $6,350 | maximums | Family: | Family: | Family: | Family: | Family: | Family: | Family: | Family: | | $14,000 | $13,800 | $13,500 | $13,300 | $13,100 | $13,100 | $12,900 | $12,700 |
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Account Limits | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | | Self-only: | Self-only: | Self-only: | Self-only: | Self-only: | Self-only: | Self-only: | Self-only: | Health Spending | $3,600 | $3,550 | $3,500 | $3,450 | $3,400 | $3,350 | $3,350 | $3,330 | Accounts (HSA) – | Family: | Family: | Family: | Family: | Family: | Family: | Family: | Family: | maximum | $7,200 | $7,100 | $7,000 | $6,850/ | $6,750 | $6,750 | $6,650 | $6,550 | contribution | | | | $6,900 | | | | | Transportation Fringe Benefits | n/a | n/a | $265/mo | $260/mo | $255/mo | $255/mo | $250/mo | $250/mo | | | | | | | | | $265/mo | $260/mo | $255/mo | $255/mo | $250/mo | $130/mo | Parking | | | | | | | Mass transit | | | | | | |
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Fees - paid by health plan - per covered life | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | Transitional Reinsurance Fee | n/a | n/a | n/a | n/a | $0 | $27.00 | $44.00 | $63.00 | Patient-Centered Outcomes | | | | | | | | | Research (PCORI) | | | | | | | | | Plan years ending 1/1 - 9/30 | TBD | $2.54 | $2.45 | $2.39 | $2.26 | $2.17 | $2.08 | $2.00
| Plan years ending 10/1 - 12/31 | TBD | TBD | $2.54 | $2.45 | $2.39 | $2.26 | $2.17 | $2.08 |
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