Year-End Webinar - Affordable Care Act Preparations

Report
Applicable Large Employers must offer an affordable healthcare
insurance plan that provides minimum essential value to a
percentage of their full-time employees or face a penalty.
◦ Review key concepts related to the Affordable Care Act (ACA)
◦ Review ACA features in Millennium (M3) and Payentry
◦ Review ACA features MPAY to provide in future enhancements
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◦ Review definitions on WebHelp at:
http://webhelp.mpay.com/#Millennium3/ACA/ACADefinitions_M3.htm
◦ Step 1 – Determine Applicable Large Employer (ALE) status
 Use prior calendar year employee counts to determine ALE status for
upcoming year
 Only for 2015, employers may use consecutive 6 month period of their
choosing from 2014
 ALE is required to report to IRS starting at 2015 Year-end
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◦ Step 1 (Cont.)
 ONLY For 2015, employers with 100+ full-time/full-time equivalent
employees subject to play or pay
 Must cover 70%+ of their full-time employees
 Exemption for first 80 employees
 Employers with 50-99 full-time / full-time equivalent employees must file
at year end to claim transitional relief
 From 2016 on, employers with 50+ full-time /full-time equivalent
employees subject to play or pay
 Must cover 95% of their full-time employees
 Exemption for first 30 employees
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◦ MPI_1403: ACA Large Employer Estimate
 Hours must be recorded in system
 Setup a code group so only earnings for service hours are counted
 ARE NOT service hours: bonus, mileage, union health & welfare benefits
 ARE service hours: FMLA, Jury Duty, PTO, On-Call
 Estimates number of Full Time and Full Time Equivalent employees
 Why an estimate? IRS requires employers to count employees by
calendar month
◦ Proceed to step 2 if:
 Employer KNOWS they are an ALE
 Employer thinks they MIGHT be an ALE
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◦ Step 2 - Employers must classify employees

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Do not count 1099 workers
Excluded: Volunteers, religious workers, students on work/study
Full-time: 30+ hours/week or 130+ hours/month
Part-time: Less than above
Separate Variable Hour employees and Non-Variable Hour employees
◦ What is “Seasonal” used for?
 Applies to employees who work full-time hours on only 120 (or fewer) days in
a calendar year because of employer’s seasonal business
 Employer may take a seasonal worker exemption when determining ALE
status
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Month
Full-time
Employees
Part-time
Hours
Full-time
Equivalent
Totals
Seasonal
Employees
Less Seasonal
Employees
January
32
1800
15
47
0
47
February
32
1800
15
47
0
47
March
32
1800
15
47
0
47
April
32
1800
15
47
0
47
May
75
600
5
80
45
35
June
75
600
5
80
45
35
July
75
600
5
80
45
35
August
75
600
5
80
45
35
September
32
1800
15
47
0
47
October
32
1800
15
47
0
47
November
32
1800
15
47
0
47
December
32
1800
15
47
0
47
Average
46
11
58
43
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Month
Full-time
Employees
Part-time
Hours
Full-time
Equivalent
Totals
Seasonal
Employees
Less seasonal
Employees
January
50
2400
20
70
18
52
February
32
3600
30
62
0
62
March
32
3600
30
62
0
62
April
32
3600
30
62
0
62
May
32
3600
30
62
0
62
June
32
3600
30
62
0
62
July
32
3600
30
62
0
62
August
32
3600
30
62
0
62
September
32
3600
30
62
0
62
October
32
3600
30
62
0
62
November
60
1800
15
75
28
47
December
60
1800
15
75
28
47
Average
38
26
64
58
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◦ M3: Standard New Hire screen requires ACA Status
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◦ M3: Employee ACA Status screen
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◦ Payentry: New Hire screen requires ACA Status
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◦ Payentry: Employee ACA Status screen
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What about all the existing employees in the system?
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◦ M3: Employee ACA Status Bulk Update
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◦ Does the employer have seasonal workers?
 Rerun MPI_1403: ACA Large Employer Estimate and include seasonal
◦ If the employer is an ALE, verify each employee’s status
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What if I don’t know every employee’s status?
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◦ M3: Employee ACA Status Audit
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◦ Employee ACA Status Audit demo
 Non-variable Hour employees
 To verify employee is classified correctly for year-end reporting
 Newly hired Variable Hour employees
 To determine employee status and eligibility for benefits
 Use an initial measurement period tied to hire date
 IRS allows initial measurement period to start first month after hire date
 Ongoing Variable Hour employees
 To determine employee status and eligibility for benefits for upcoming
plan year
 Use an ongoing measurement period that is the same for all (similar to a
traditional open enrollment)
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◦ Variable hour measurement periods explained
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◦ Step 3 – Determine plan affordability for full-time employees
 Employers may use a “Safe Harbor” method by calculating the employee’s
premium contribution for employee-only coverage in the lowest cost plan that
provides minimum essential coverage at no more than 9.5% of the employee’s
income.
 Only applies to employees who are not eligible for a Federal program such as
Medicare, Medicaid, CHIP, etc…
 Employer penalties for not offering healthcare insurance are dependent on one or
more employee receiving a subsidy when the employee purchases insurance
through Healthcare.gov or state marketplace.
 Some employers offer multiple healthcare plans
 Only the lowest cost plan that provides minimum essential value must meet the
affordability test
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◦ Step 3 – Determine affordability
 Two easy ways to calculate
 Determine income limit for Federal programs and set employee
contribution at 9.5% of that
 Federal Poverty Level, varies by state
 Determine full-time employee with lowest wage and set employee
contribution at 9.5% of that
 What income can the employer use to determine that 9.5%?
 W-2 Box 1 wages
 Rate of pay
 Employers who offer coverage, but make coverage unaffordable to
some low wage employees may be subject to an IRS fee for those low
wage employees.
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◦ Report:
 MPI_6400: ACA Employer Tool Report
 Employees shopping on Healthcare.gov (or state Marketplace)
 Employees need information about their employer
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◦ ALE must start collecting data in January 2015
 Employee ACA status information
 Insurance information
◦ All ALEs will be required to report starting in year-end 2015
◦ IRS has published draft forms and instructions
 Public comment period closed November 3rd
◦ Forms 1094-C and 1095-C are employer’s responsibility
 MPAY will be ready to help employers with these forms
◦ Forms 1094-B and 1095-B generally be filed by employer’s insurance
carrier
 Self insured employers will likely require the plan’s Third Party Administrator
to create forms and file on employer’s behalf
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◦ EE ACA Bulk Update
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◦ EE ACA Status Audit
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◦ Enhancements to M3 Employee ACA Status Audit tab
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2014-Q4 release
Sorting on all grid columns
Show those employees with no ACA status record
Improved handling of rehires
Improve detection of gaps in service
◦ Enhancements to Payentry Employee ACA Status Audit tab
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Early 2015
Show those employees with no ACA status record
Improved handling of rehires
Improve detection of gaps in service
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