How to Manage PPACA Compliance

Report
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Effectively Manage PPACA Compliance
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What do the measure-determineadminister-and stability provisions
of the Affordable Care Act mean to
your Church or Nonprofit?
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• Are you considered a large employer?
• Do you know how many FT Employees and FT Equivalents
your Church or Nonprofit has?
• How are you going to establish and track the various
measurement periods?
• How are you going to calculate and track the 9.5%
affordability regulation for the lowest cost single coverage
• Do you know how to calculate pay or play penalties if your
Church or Nonprofit doesn’t offer group medical coverage
OR you don’t provide affordable medical coverage?
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Questions that must be answered!
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GENERAL ACA COMPLIANCE
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Often it is easy to make
something difficult, but
difficult to make
something easy!
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Large Employer
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Employers must determine whether they are considered an
Applicable Large Employer (ALE) by tracking their FT
employees and total hours worked by their Variable Hour
Employees. This is a calendar year determination. In 2014, an
ALE may use any 6 consecutive month period.
• Large Employer = in 2015, at least 100 FT and/or FTE
•
•
•
•
Hours worked and intended to work
FT = based on 30 hour work week
FTE = FT + total PT hours worked per month / 120
Seasonal – not counted if working less than 120 days per year
FTEs = FT employees + (total PT hours per month / 120)
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Let Me Count the Hours…
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Employer Mandate – Measurement of VHEs
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Tracking (Measure) the
Employee Hours
• 30 hours per week or
• At least 130 hours
per month
• Include hours
worked
• And hours paid but
not worked (i.e.
vacation, LOA, sick
days, etc.)
• Exclude:
• Owners
• Family Members
• Seasonal
Four recommended main phases for
Employers for newly and ongoing
hired employees:
1. Initial Measurement Period
(IMP)
2. Standard Measurement
Period (SMP)
3. Administrative Period
4. Stability Period
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• Large employers
must track their
employees
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Measurement periods defined
Standard Measurement Period-A designated period of time between 3-12 months to
measure hours for ongoing employees that have completed the Initial Measurement
Period. Employer may choose the time period in which to start and end the SMP, but
the time period must be uniform for all employees in the same category.
Administrative Period-The period of time, not longer than 90 days, where employers
have the option to delay the stability period to determine which employees are eligible
for coverage and to notify and enroll employees.
Stability Period-Must be at least 6 consecutive months in length and no shorter than the
Standard Measurement Period. During the Stability Period the employer must offer
affordable minimum essential value coverage to all full-time and full-time equivalent
employees . If they employer fails to comply with these regulations they will be
assessed a penalty.
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Initial Measurement Period-A designated period of time between 3-12 months where
the employer determines whether the newly-hired variable hour employee is “fulltime”. The employer must determine whether or not the employee worked an average
of 30 hours a week during this period.
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Measurement Periods Defined
Standard
Measurement Period
• At least 3 but no
more than 12
months
• Categories
accepted:
• Collectively &
Non-Collectively
Bargained Ees
• Salaried vs.
Hourly
• Ees of different
entities
• Ees located in
different States
Administrative
Period
• Maximum is 90
days
• Period for
Employers to
evaluate the
eligibility of
Employees
• Must not prevent
any gaps in
coverage
Stability Period
• At least 6
consecutive
months; no
shorter than
Standard
Measurement
Period
• Period for
ongoing
Employees that
have completed
one Standard
Measurement
Period
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March 2015 Renewal
2014
2015
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
2016
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
Standard Measurement Period:
3/1/2014 – 11/30/2014
AP
Standard Measurement Period:
3/1/2015 – 11/30/2015
Stability Period:
3/1/2015 – 11/30/2015
AP
Standard Measurement Period:
3/1/2016 – 11/30/2016
Initial Measurement Period
7/15/2014 – 4/14/2015
AP
Stability Period:
7/15/2015 – 4/14/2016
9 month Standard Measurement Period
3 month Administrative Period (AP)
9 month Stability Period (SP)
9 month Initial Measurement Period
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Measurement Periods – Action
Items
• Employer Mandate is
delayed until 2015
• Employers must begin
measuring their
employees in 2014
• Determine
Measurement Periods
that are best for your
business
• How will this get
accomplished?
• Internalize process,
outsource, integrate
technology, etc.
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Employer Mandate - Affordability
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Coverage Affordability
• Key Requirements
• Offer Coverage
• Must offer to 70% in
• Key Decisions
2015 and 95% in 2016
of the FT Employees
• What does your
w2for
safe
harbor provision for affordable
• Coverage
employees
maximum penalty look
coverage
and dependents
like?
• Offer Affordable
Coverage
• Include the MV
requirements
• For the lowest cost
coverage, employees
pay no more than 9.5%
of their W-2 income
• Will you cover
spouses?
• What is the expectation
that your FT employees
will receive a subsidy?
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AFFORDABILITY
How is payroll used to determine the Employer Mandate
requirement of “Affordability”?
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Affordable Coverage
• # FT Employees – 30 x $2,000 = Annual Penalty
Employer Decides to Offer Health Insurance = Play
• 100+ FT employees or equivalents in 2015
• ER must:
• Must offer coverage to 70% (2015) & 95% (2016) of its FT
employees & their dependents (does not include spouse)
• Employer’s plan pay for at least 60% of covered expenses
• Employee’s required contribution for self-only coverage must not
exceed 9.5% of household income (W-2 Safe Harbor) – least
expensive single rate
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Employer Decides Not to Offer Health Insurance = Pay
• 100+ FT employees or equivalents in 2015
• Penalty imposed if subsidy is given to any one of its FT
employees.
• If conditions aren’t met and if subsidy is given to any one of its FT
employees, employer is penalized $3,000 / EE
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Employer Mandate Requirements
Determination of Applicable
Large Employer Status
Measuring VHEs
SmallFSA
Employer
| PRAHealth
| HSA Care
W-2 Reporting
of EmployerCalculation
of Affordability
COBRA Tax
| Retirement
Credit Plans
Sponsored
Coverage
Common
Ownership?
The
Data
Found
Bill
Determination
Reconciliation
of FTEs in
Reportable,
Not Taxable
Metrics
Utilize:
Deduction
Calculation
& Limit
of Average
Management
Payroll
Box
12 with
DD to
o Status
ofCode
EE (FT/VHE)
Eligibility
Annual Taxable
Counts Wages
Identify
the Amount
o Exclusions
(Owner,
New
Estimation
Hires & Terminations
of Tax Credit
Seasonal, etc.)
o Measurement Period Status
o Average Hours Worked
o Anticipated Annual Wages
PAYROLL
helps employers
effectively manage
ACA compliance
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So, what is the missing puzzle piece
for ACA compliance?
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Now is the Time to
Measure, Count, and
Determine – Are you
Prepared?
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