EMPLOYER REPORTING REQUIREMENTS UNDER THE PPACA Department of Human Resource Management Business Symposium HR Live – What You Need to Know Today! November

EMPLOYER REPORTING REQUIREMENTS UNDER THE

PPACA

Department of Human Resource ManagementBusiness Symposium

HR Live – What You Need to Know Today!November 19, 2015

November 19, 2015 2

TOPICS

ACA Designated Government Entity Reporting Agreement Agencies’ Responsibilities DHRM’s Responsibilities

Definitions Under the ACA Full-Time Employee Measurement Period

November 19, 2015 3

TOPICS

Counting Employees Contingent Workers Common Law Employee

ACA Penalties

ACA Reporting

Patient Protection & Affordable Care Act (PPACA)

PPACA: Pervasively Problematic and

Administratively Complex Act

ACA:

Atrociously Complex to Administer

November 19, 2015 4

Patient Protection & Affordable Care Act (PPACA)

Federal Agency charged with regulating and enforcing the ACA:

November 19, 2015 5

Designated Government Entity Reporting

Agreement DHRM owns Benefits Eligibility System

(BES) Repository for Information Needed for

ACA required reporting DHRM will provide the required ACA

reporting based on data provided by agencies

November 19, 2015 6

Reporting Agreement In order to report on behalf of the

agencies, we must have an agreement designating DHRM as the reporting agent.

To be signed by Agency Head and Sara Wilson

Must be filed with healthcare planNovember 19, 2015 7

DHRM’s Responsibilities Report Sections 6055 and 6056

information to IRS Employer’s summary of employee counts

and number of eligible employees offered coverage (IRS Form 1094 - electronic employer transmittal)

Report tax information to each full-time employee covered by the group health plan(IRS Form 1095 - individual statements mailed to home addresses)November 19, 2015 8

DHRM’s Responsibilities DHRM will take actions necessary to

ensure that information is accurate. However, if returns or statements

contain incorrect information or are deficient, DHRM will ensure that the corrected returns/statements are submitted to the IRS/affected employee(s).

November 19, 2015 9

Agency’s Responsibilities

Record and maintain: all information in BES timely and accurately information on employees identified as full-

time under ACA

Provide counts to DHRM of: full-time employees on a monthly basis total number of employees (head count) on

a monthly basis

November 19, 2015 10

Agency’s Responsibilities Provide these counts in the format

and within the timeline prescribed by the DHRM Office of Health Benefits

Certify that all counts required are accurate as reported


Agency’s Responsibilities Review all contracts with contingent

workers to ensure that contracts are written to clearly and appropriately assign responsibility for health care coverage for contingent workers


Agency’s Responsibilities Review status of independent

contractors and affirm that such contractors are not common law employees.

Assume liability for penalties incurred under ACA for misclassification of employees and inaccurate reporting of employee data to DHRM


Agency’s Responsibilities Monitor all hours worked by wage

employees and certify compliance with 2013 Amendment to the Manpower Control Program.

Review hours, duties, and contracts of contingent workers providing services and affirm that they are not common law employees.*


ACA Definitions Applicable Large Employer

Applicable Large Employer: 50 or more full-time equivalent employees will need to file an annual information return reporting whether and what health insurance they offered employees. In addition, they are subject to the Employer Shared Responsibility provisions.


ACA Definitions Total Number of Employees: Head

count of all employees Full-Time Employee: Works 30 hours

or more per week on average during the employer’s measurement period.


ACA Definitions Part-Time Employee: Works less than

30 hours on average during the employer’s measurement period.Includes wage employees (Not just salaried part-time employees)

Measurement Period: May 1st through April 30th annually


ACA Definitions Hours of Service

Counting hours of service: Each hour for which an employee is

paid or entitled to pay whether duties are being performed or not.

Count leave time (annual, holiday, illness, incapacity (including disability), layoff, jury duty, military duty, leave of absence, etc.)



Which hours don’t count: any hour of service performed as a bona fide volunteer, as part of a Federal Work-Study Program (or a substantially similar program of a State or political subdivision thereof) or to the extent the compensation for services performed constitutes income from sources outside the United States.



On-Call Hours: Must use reasonable (but undefined)

method All hours paid for call-back duty must be

counted If the on-call duty is RESTRICTED, count

hour for hour.



On-Call Hours: If flat rate is paid for number of hours of

unrestricted on-call duty, project that flat rate based on worker’s normal hourly rate.

Example: Worker’s hourly rate is $20 per hour. Worker is paid $50 for serving 24 hours of

unrestricted on-call duty. Count 2.5 hours of service.


Our Workforce – F/Q Status

Full-time (40 hours per week) salaried employees

Quasi-full-time (30 hours + per week) salaried employees

Faculty (contractual)


Our Workforce – F/Q Status

Full-time Quasi-full-time Faculty (contractual)

Eligible (under ACA) for health-care coverage and counted as full-time employees


Our Workforce – P Status Part-time salaried employees (20 –

29 hours per week)


Our Workforce – P Status Part-time employees

Not eligible under ACA for healthcare coverage and not

counted as full-time employees

(May participate in state health insurance plan at full cost.)


Our Workforce - Wage Wage employees – Limited to working 1500

hours during the measurement period (approximately 29 hours per week on average)

Adjunct faculty – count hours based on formula


Our Workforce - Wage Wage employees Adjunct faculty

Not eligible under ACA for healthcare coverage – not counted as full-time employees


Wage Employees Seasonal

Wage employees – Sub-category:Seasonal employees Work that is exclusively performed during

specified periods of the year Period begins and ends each calendar year in

approximately the same part of the year, e.g., summer, winter, General Assembly

Six months or less

Not eligible under ACA for healthcare coverage



Wage employees – Sub-category: Seasonal employeesSeasonal employees may work up to, or exceed 40 hours per week during the defined season or specified period of time, provided that the employees do not work more than 29 hours per week on average over the course of the applicable twelve month measurement period.




Wage employees – Sub-category:Seasonal employees



Wage employees – Sub-category:Seasonal employees If genuinely “seasonal” by ACA definition

and their hours worked do not exceed the 1500 hour threshold

Not eligible under ACA for healthcare coverage and not counted as full-time employees.


Wage Employees Variable Hours

Wage employees – Sub-category:Variable Hour Employees• Work that is exclusively performed on an irregular and/or unpredictable basis such that an employer cannot determine whether or not the employee will average more than 29 hours per week.




Wage employees – Sub-category:Variable Hour Employees



Wage employees – Sub-category:Variable Hour employees If genuinely “variable hour” employees by

ACA definition and their hours worked do not exceed the 1500 hour threshold

Not eligible under ACA for healthcare coverage and not counted as full-time employees.


Our Workforce – Contingent Workers

Contingent workers contracted via: temporary service agencies or vendors under contract with the State and

its individual agencies (VITA, DGS) or contracted with vendors through agencies

independently or independent contractors.


Our Workforce Contingent Workers – potentially our

greatest ACA risk ACA requires health care coverage for

contingent workers who are deemed to be COMMON LAW EMPLOYEES


Contingent Worker Survey Will be sent to Agency Heads Agency Head to designate agency

contact Common Law Employee Checklist to

be completed on each contingent worker by procurement managers/program managers

May need HR’s assistance to determine “common law employee” status


Contingent Worker Survey Checklists are scored Each contingent worker’s name and

engagement information will be recorded on the survey along with the “common law employee” score

Report to DHRM


Common Law Employees

Determination of Common Law Employee Status


Common Law Employee Test

Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is so even when you give the employee freedom of action.

What matters is that you have the right to control the details of how the services are performed.



1. Relationship of the parties2. Behavioral control3. Financial control

Other questions from IRS Employee Determination Form SS-8



1. Relationship of the parties



1. Relationship of the parties



2. Behavioral control



2. Behavioral control


Common Law Employee Test 3. Financial control



3. Financial control


Common Law Employee Test Other questions from IRS Employee

Determination Form SS-8


Health Insurance Offered

Under the ACA:

Health insurance must provide Minimum Essential Coverage AND

Be affordable


Penalties

Generally the employer is not subject to the Employer Shared Responsibility Payment (ESRP) unless at least one full-time employee receives a premium tax credit.


Penalties

(a) The employer does not offer health coverage or offers coverage to fewer than 95% of its full-time employees and the dependents of those employees, and at least one of the full-time employees receives a premium tax credit to help pay for coverage on a Marketplace;

OR

(b) The employer offers health coverage to all or at least 95% of its full-time employees, but at least one full-time employee receives a premium tax credit to help pay for coverage on a Marketplace, which may occur because the employer did not offer coverage to that employee or because the coverage the employer offered that employee was either unaffordable to the employee or did not provide minimum value


Employer Shared Responsibility Payment

Calculation:

(1)If coverage is not offered or offered to fewer than 95% of full-time employees, the ESRP equals No. of Full-Time Employees (minus 30) Multiplied by $2,000.

Agency having 230 employees: $400,000


Employer Shared Responsibility Payment

Calculation:

(2) If minimum essential coverage offered was not affordable, did not provide minimum value, or the employee was not one of the 95% offered minimum essential coverage, $3,000 annually for each full-time employee who receives the premium tax credit. November 19, 2015 53

ACA Employer Reporting

In June 2015 DHRM communicated to you that our agency will file the necessary forms in early 2016 to comply with the Affordable Care Act (ACA) employer mandate to report health care coverage to employees and the Internal Revenue Service (IRS).


ACA Employer Reporting IRS Form 1095 (individual statements

mailed to home addresses) must be provided to employees by January 31 (February 1 this year since January 31 is on a Sunday); and

IRS Form 1094 (electronic employer transmittal) must be filed by March 31.



DHRM will rely on the information in the Benefits Eligibility System (BES) and a certification of total employee counts provided by participating employers to file the IRS reports.

The information in BES and the employee counts must be accurate.



To help reconcile the employer’s BES data, the following reports are available in HuRMan:

BES Exception Report BES Enrollment Reports BES ACA Reconciliation Report



BES Exception Report:

Monthly report listing discrepancies found in BES that need attention.

Note: system-generated SSNs that require follow-up are on this report.



BES Enrollment Reports:

Weekly reports of total membership in BES – one report shows participants and the other shows corresponding covered dependents. It is available on the 3rd, 10th, 17th, and 24th of each month.



BES ACA Reconciliation Report:

Monthly report of coverage offered to employees for the calendar year. The first official report will be available the first week in December for the period January – November 2015.



Communications relating to this major ACA reporting requirement are distributed by OHB and are posted on the DHRM website.

Pay special attention to communications with deadlines for reconciliations and certifications.



The following published communications are specific to ACA reporting:

ENews dated November 9, 2015 ENews dated October 30, 2015 ENews dated June 9, 2015 Numbered Memo 15-05 – 9/14/15


Summary


“The more you explain it, the more I don’t understand it.


QUESTIONS

Send ACA questions to the Policy mailbox or your assigned HR Management Consultant.

[email protected] Send ACA reporting questions to the OHB

mailbox. [email protected]

mailto:[email protected]

mailto:[email protected]

Documents

EMPLOYER REPORTING REQUIREMENTS UNDER THE PPACA Department of Human Resource Management Business Symposium HR Live – What You Need to Know Today! November