2F—Affordable Care Act KASBO fall 2013

Report
Implementation Issues for
Kentucky School Districts
AFFORDABLE CARE ACT
Presenters
 Susan Barkley
[email protected]
502-564-3930 extension 4437
 Jan Johnston
[email protected]
859-654-6911
 Melissa Sullivan
[email protected]
502-564-3846 extension 4415
Resources
 KDE website: Health and Life Insurance
Benefits and Flexible Spending Accounts
page
 http://education.ky.gov/districts/FinRept/Pag
es/Health-and-Life-Insurance-Benefits-andFlexible-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
Failure to comply = PENALTY
Action Steps
Who are
employees?
Am I a
“large”
employer?
Which
hours
count as
“hours of
service”?
What
action
should be
taken by
the board?
Repeat Annually
Which
employees
are fulltime for
ACA?
How do I
document
offers of
coverage?
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
All who
perform
work for
the district
Independent
Contractors
“Large” Employer
 Full-time and FTEs = 50 or more
 Most KY school districts are large
 ACA applies to all large employers
“Hours of Service”
 Hours actually worked (or equivalency)
 Hours paid or entitled to be paid
 Vacation
 Holiday
 Sick leave
 Disability
 Jury duty
 Military duty
Who Do We Need to Worry
About?
Substitutes
(classified and
certified)
Part-time
employees
Extended school
services workers
Retirees who
return parttime or as subs
Paraprofessional
coaches
Day care
workers
Student
workers
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
Stability Period –
time period
coverage is offered
based on results of
the measurement
period
Administrative
Period – perform
eligibility
calculations and
make offers of
coverage
Recommended Measurement Periods
12 Months
Measurement
10/3/13-10/2/14
90
days
Admin
10/3/1412/31/14
90
days
9 Months
90
days
9 months
Stability
1/1/15-12/31/15
Measurement
10/3/14-10/2/15
Admin
10/3/1512/31/15
Stability
1/1/16-12/31/16
Measurement
10/3/15-10/2/16
Admin
10/3/1612/31/16
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
Measurement
4/1/14-3/31/15
INITIAL
Admin
4/1 4/30/15
Standard
Measurement
10/3/14-10/2/15
INITIAL Stability
5/1/15-4/30/16
Standard
Admin
10/3/1512/31/15
Note that the standard
measurement period begins during
the initial measurement period;
both periods occur simultaneously
Standard Stability
1/1/16-12/31/16
Offering Coverage
 ACA requires coverage for full-time




employees and dependent children – not
spouses
Coverage must begin Jan 1, 2015
Offer must be made, employee can decline
Maintain documentation
Annual requirement
Offering Coverage
 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
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, funds come from SEEK
 Avoid a blanket policy to
offer coverage to all employees
Penalty
 If no Substantial Compliance
 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
 IRS guidance not finalized
 More information forthcoming
Your Good Questions

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