New Dollar Amounts: Cost-of-Living Adjustments & Increased Penalties

John GarnerCompliance, Legislative Updates, Resources

A variety of federal agencies have released a number of new dollar amounts reflecting cost-of-living adjustments.

The Department of Health and Human Services (HHS) has announced new penalty amounts for violations of the privacy and security provisions of the Health Insurance Portability and Accountability Act.  If a covered entity (such as an employer-sponsored group health plan) or a business associate did not know and by exercising reasonable diligence would not have known that the covered entity or business associate violated a provision, the minimum penalty is $110, up from $100.  If the violation is due to reasonable cause and not willful neglect, the minimum penalty is $1,110, up from $1,000.  If the penalty was due to willful neglect, but was corrected within 30 days, the minimum penalty is $11,002, up from $10,000.  If the violation was due to willful neglect and was not corrected within 30 days, the penalty is $55,010, up from $50,000.  The maximum penalty per violation in each category is $55,010, up from $50,000.  For each category, the maximum penalty for a calendar year is $1,650,300, up from $1,500,000.

HHS has also announced the maximum out-of-pocket limits for 2018.  For plan years starting in 2018, the maximum out-of-pocket limit for an individual will be $7,350, up from $7,150 in 2017.  The maximum out-of-pocket limit for a family will be $14,700, up from $14,300 in 2017.

The Patient-Centered Outcomes Research Institute fee for plan years ending on or after October 1, 2016 and before October 1, 2017 will be $2.26 per covered life, up from $2.17.

Under health care reform, individuals who do not have minimum essential coverage are subject to a penalty.  Generally, the penalty is the greater of 2.5% of household income or $695.  The maximum penalty is the national average bronze plan premium.  The Internal Revenue Service (IRS) has announced that the 2016 maximum monthly penalty for an individual is $223 and the maximum monthly penalty for a family of five or more is $1,115.

The IRS has announced that the standard mileage rate for 2017 will be 53.5 cents per mile, down from 54 cents in 2016.  The rate for mileage to obtain medical care will be 17 cents per mile, down from 19 cents in 2016.