implementation issues for kentucky school districts
TRANSCRIPT
AFFORDABLE CARE ACT
Implementation Issues for Kentucky School Districts
Resources
KDE website: Health and Life Insurance Benefits and Flexible Spending Accounts page
http://education.ky.gov/districts/FinRept/Pages/Health-and-Life-Insurance-Benefits-and-Flexible-Spending-Accounts.aspx Implementation Guide Timekeeping documentation KEHP FAQs and Responsibility Chart
Disclaimer
The Guide is only one of many resources
IRS continues to issue regulations on ACA
Information in the Guide could become inaccurate
Not comprehensive of all aspects of ACA
Consult legal counsel
Whose Responsibility?
Districts: Eligibility and offers of coverage (Play or
Pay) Nondiscrimination Marketplace Notice Employer Reporting
KEHP: Affordable coverage Adequate coverage Plan details and options
Employer Mandate
Employer Shared
Responsibility
Play or Pay Mandate
Free Rider Penalty
Failure to comply = PENALTY
The ACA seems like a mountain
But KEHP is taking care of compliance with affordability and adequacy requirements
And MOST employees are already receiving health benefits, including bus drivers
And we know many variable hour employees won’t work enough separate days at 8 hours a day to change their eligibility status – therefore we don’t need to track their actual time
So the work we have to do for ACA isn’t as big a mountain as we expected
What do we have to deal with? Establish policies relating to ACA Track actual time for employees close to
the eligibility break point and part-timers Calculate eligibility for all variable hour
employees Document offers of coverage Provide marketplace notice to new hires Ensure nondiscrimination Employer reporting to IRS
Who Do We Need to Worry About?
Substitutes (classified
and certified)
Day care workers
Student workers
Retirees who return part-time or
as subs
Extended school
services workers
Part-time employees
Expectations
If employee is expected to work full-time must offer coverage at the time of hire
If it is unknown if the employee will have an average of 30 service hrs/week or 130 service hrs/month, use the measurement period
Action Steps
Who are employee
s?
Am I a “large”
employer?
Which hours
count as “hours
of service”
?
What action should
be taken by the board?
Which employees are
full-time for ACA?
How do I document offers
of coverag
e?
Repeat Annually
Who are Employees?
An employee relationship exists when the employer has the right to control and direct the individual who performs the services and the details and means by which the result is accomplished.
Who are employees?
Common Law
Employees
Independent
Contractors
All who perform work for
the district
“Large” Employer
2015 = 100 or more FT & FTEs
2016 = 50 or more FT & FTEs
Most KY school districts are large
“Hours of Service”
Hours actually worked (or equivalency)
Hours paid or entitled to be paid Vacation Holiday Sick leave Disability Jury duty Military duty
Equivalency Hours
If you don’t document actual time
worked:
8 hours per day
40 hours per week
Employment Breaks
Breaks at least 4 consecutive weeks in length
Cannot count zero hours worked Exclude from average hours of
service
Examples: summer break, FMLA leave
Eligibility Break Point
Step 1 – calculate number of days excluding breaks of > 4 weeks
Step 2 – multiply 5.997 by the number of days from Step 1 and then divide by 8
5.997 * 207 / 8 = 154 days
Do I need to track actual time?
To limit the number of employees tracking actual time worked:
Limit number of days/year Limit number of days/week Use equivalency of 8 hrs/day
Board Action
Measurement, administrative, and stability periods
Limitation of days worked Track actual hours or use
equivalency Terminate subs that refuse assignments
Full-time Employees for ACA
Employees who average 30 hours of service per week
or 130 hours of service per
month
Who is Full-time?
Average hours of service over measurement period
Max 12 months Recommended: October 3, 2013 – October 2, 2014 Don’t forget to exclude breaks >4
weeks
Measurement Period – collect hours of service
data to be used in the calculation
Administrative Period – perform eligibility
calculations and make offers of
coverage
Stability Period – time
period coverage is offered based on results of the measurement
period
12 Months
90 days
9 Months
90 days
9 months
90 days
Measurement
10/3/13-10/2/14
Admin10/3/1
4-12/31/
14
Stability1/1/15-12/31/15
Measurement10/3/14-10/2/15
Admin10/3/1
5-12/31/
15
Stability1/1/16-
12/31/16
Measurement
10/3/15-10/2/16
Admin10/3/1
6-12/31/
16
Recommended Measurement Periods
Continually measuring
What About Mid-Year Hires? Initial Measurement Period
Begins the first day of the month after hired
Max 12 months Transitions to standard measurement
period
Initial Measurement Period
INITIAL Measurement4/1/14-3/31/15
INITIAL
Admin
4/1 -4/30/
15
INITIAL Stability5/1/15-4/30/16
Standard Measurement
10/3/14-10/2/15
StandardAdmin
10/3/15-12/31/15
Standard Stability1/1/16-12/31/16
Note that the standard measurement period begins during the initial measurement period; both periods occur simultaneously
Offering Coverage ACA requires coverage for full-time
employees and dependent children – not spouses
Coverage must begin Jan 1, 2015 for districts with 100 or more full time & FTEs
Coverage must begin Jan 1, 2016 for districts with 50 or more full time & FTEs
Offer must be made, employee can decline
Maintain documentation Annual requirement
Offering Coverage
Full-time during Measurement Period = Coverage during Stability Period regardless of hours of service during Stability
NOT full-time during Measurement Period = NO coverage during Stability Period regardless of hours of service during Stability
COBRA
Termination
Reduction in hours (no longer eligible)Failure to pay employee portion
Funding
State funds non-federal employee premiums
If health insurance appropriation is inadequate, unexpended SEEK funds may be used
Avoid a blanket policy to offer coverage to all employees
Penalty If no Substantial Compliance
For 2015 - 70% of full-time employees Starting in 2016 - 95% or no more than 5
full-time employees Penalty is
Number of full-time employees minus 30 Multiplied by $167 per month
Nondiscrimination
Cannot provide more for highly compensated employees
Example: paying the superintendent’s employee premiums
Penalty is Number of employees minus the
superintendent Multiplied by $100 per day until in
compliance Solution: tax the additional benefit
Employer Reporting
Will be required First report due March 2016 for 2015
plan year data IRS guidance not finalized More information forthcoming
Your Good Questions