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PART 1 • DATE
Michael Gomes, Executive Vice PresidentBenefitMall
WELCOME!
REGULATORY COMPLIANCE
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WEBINAR OVERVIEW
Attendees will learn about
KEY COMPLIANCE
DATES
EMPLOYEE GROUPS
AUTOMATIC ENROLLMENT & WAITING PERIOD
EMPLOYER PENALTIES
SAFE HARBOR CALCULATIONS
KEY COMPLIANCE DATES
JANUARY 1, 2014
EMPLOYER SHARED
RESPONSIBILITY PROVISIONS
INDIVIDUAL MANDATE
STATE HEALTH BENEFIT
EXCHANGES
EMPLOYER MANDATE COMPLIANCE DATE
• Will my company have to comply with employer-shared responsibility provisions?
• What kind of insurance will my company have to provide?
• To whom will I have to provide insurance?
• What about seasonal, per diem, or part-time employees?
EMPLOYEE GROUPS
A full-time employee is someone employed an average of at least 30 hours of service per week
Employers must make an offer of coverage to at least 95% of its full-time employees and their dependents
FULL-TIME EMPLOYEES
Hours of service include:
EACH PAID HOUR OF WORK: Vacation
Holiday Illness or Leave of Absence
Incapacity Layoff
Jury Duty Military Duty
FULL-TIME EMPLOYEES
• Includes any employee who does not fall
under the full-time designation
• Will be included in calculation to determine whether employer is an applicable large employer, and thus subject to employer shared responsibility requirements
• Employers will not have to make an offer of health coverage to these employees
PART-TIME EMPLOYEES
• PER-DIEM: can be counted as full- or part-time depending on average hours of service worked
o If employee is not paid on hourly basis, calculate hours worked using: actual hours from records, days-worked equivalency, or weeks-worked equivalency
OTHER CATEGORIES OF EMPLOYEES
• SEASONAL: critical in determining whether an applicable large employer may claim an exception from employer shared responsibility requirements based on seasonal workers
OTHER CATEGORIES OF EMPLOYEES (cont.)
• UNION: to date, union workers are not treated as distinct entity in determining whether or not to offer coverage
OTHER CATEGORIES OF EMPLOYEES (cont.)
AUTOMATIC ENROLLMENT & WAITING PERIOD
• Employers that are subject to the Fair Labor Standards Act, and have more than 200 full-time employees, must automatically enroll new full-time employees
• Employer must also provide adequate notice and the opportunity for the employee to opt out
AUTOMATIC ENROLLMENT
• For plan years beginning on or after January 1, 2014, a group health plan or health insurance issuer offering group health insurance coverage shall not apply any waiting period that exceeds 90 days
o If the employee takes additional time to elect coverage, the employer will not be penalized
90 DAY WAITING PERIOD REQUIREMENTS
• IF a group’s health plan conditions eligibility on an employee regularly having a specified number of hours of service per period (or working-full time),
• AND it cannot be determined that a newly hired employee is reasonably expected to regularly work that number of hours per period, (or working-full time) the plan may take a reasonable period of time
• Time not to exceed 12 months and beginning on any date between the start day and first day of calendar month following start day
90 DAY WAITING PERIOD – SAFE HARBOR FOR NEW VARIABLE HOUR
AND SEASONAL EMPLOYEES
• The employer may take a reasonable period of time to determine if the employee meets the plan’s eligibility condition
• Coverage must be made effective no later than 13 months (and a fraction of one month) after the employee’s start date
90 DAY WAITING PERIOD – SAFE HARBOR FOR NEW VARIABLE HOUR
AND SEASONAL EMPLOYEES (cont.)
• Group health plan provides that employees are eligible for coverage after one year of service.
• In this example, the plan's eligibility condition is based solely on the lapse of time.
• Therefore, it is impermissible because it exceeds 90 days.
90 DAY WAITING PERIOD – EXAMPLE
EMPLOYER PENALTIES
The Patient Protection and Affordable Care Act (PPACA) requires most large employers offer affordable minimum essential coverage to their full time employees, or pay a monthly tax penalty.
EMPLOYER PENALTIES: OVERVIEW
• If at least one full-time employee receives a premium tax credit, the employer will be assessed a monthly penalty equal to the number of full-time employees, minus the first 30, multiplied by one-twelfth of $2,000 any applicable
NO COVERAGE
• Example:
o Employer has 80 full-time employees, does not offer coverage. One is certified to receive a tax credit.
o 80 full-time ee – 30 x ($2,000 x 1/12) = $8,333.33 per month
NO COVERAGE
• Coverage exceeds 9.5% of employee’s income
• Coverage does not pay for at least 60% of covered health care expenses
• Penalty would be for each employee who receives coverage
UNAFFORDABLE/INADEQUATE COVERAGE
• Example:
o Employer has 80 full-time employees, offers coverage that does not meet affordability requirements.
o 30 employees receive credits for coverage x
($3,000 x 1/12) = $7,500
UNAFFORDABLE/INADEQUATE COVERAGE
SAFE HARBOR RULES
1. Form W-2 Safe Harbor
2. Federal Poverty Line Safe Harbor
3. Rate of Pay Safe Harbor
COVERAGE SAFE HARBOR
• Standard measurement period for ongoing employees: 3 to 12 months• Determine whether employee worked an average of 30 hours per week
during that periodo YES: treat employee as full-time during subsequent stability periodo NO: may treat employee as part-time during subsequent stability period
Stability period must be at least 6 months, but cannot be shorter than the standard management period
STANDARD MEASUREMENT PERIOD
ADMINISTRATIVE PERIOD
STABILITY PERIOD
LOOK-BACK PERIOD
1. Collectively bargained employees and non-collectively bargained employees
2. Salaried and hourly employees
3. Employees of different entities
4. Employees located in different states
EMPLOYEE LOOK-BACK CATEGORIES
CONCLUSION
• Next Webinar will focus on:
o W-2 Issues
o Control Group Rules
o Exchanges/Subsidies
o Equivalency Test
o Essential Health Benefits and Covered Costs
FINAL THOUGHTS
For additional health care Reform updates, please monitor:
• www.benefitmall.com• www.healthcareexchange.com• www.compupay.com
Q & A