Implementing the ACA at YourCommunity College

Association of California Community College Administrators

Implementing the ACA at YourCommunity College

Association of California Community College Administrators

Annual ConferenceFebruary 26, 2014

Annual ConferenceFebruary 26, 2014

Presented by

School Services of California, Inc.

Michelle McKay Underwood, Director, Legislative Services

Sheila G. Vickers, Vice President

Long Beach City College

1

Long Beach City College

Dr. Cindy Vyskocil, Associate Vice President, Human Resources

Julie Kossick, Director, Human Resources

Diane Bangs, Human Resources Manager, Academic

Affordable Care Act

Federal health care reform was enacted on March 23, 2010:

House of Representatives (H.R.) 3590, The Patient Protection and Affordable Care Act (ACA)

H.R. 4872,The Health Care and Education Affordability Reconciliation Act of 2010

Provisions are being phased in over a number of years

2

Provisions are being phased in over a number of years

The most significant changes become effective in 2014 and 2015:

Individual mandate: January 1, 2014

Employer reporting requirements: January 1, 2015 (delayed fromJanuary 1, 2014)

Employer shared responsibility payments: upon plan renewal in 2015(delayed from 2014)

Delayed to 2016 if 50 to 99 full-time employees

Affordable Care Act

Individual mandate: Individuals not provided health benefits by their employer must purchase through the Exchange or pay a penalty

California’s Exchange is Covered California www.coveredca.com

Employer reporting requirements:

All employers must annually report certain information to the Internal Revenue Service (IRS) about employees, dependents, and their health

3

Revenue Service (IRS) about employees, dependents, and their health benefits coverage

Employers with 50 or more employees must report additional details to the IRS about the health benefit plans, coverage, and costs

Employer shared responsibility payments: Employers with 50 or more employees will be required to provide health benefits to full-time (30 or more hours per week) employees or pay up to a $2,000 to $3,000 penalty per employee, depending on the situation

Employer Shared Responsibility Payments

Important definitions:

“Applicable large employer” is defined as employing at least 50 “full-time” equivalent employees

Where “full time” is defined as employed at least 30 hours per week

Coverage of “minimum value” is defined as covering at least 60% of the total allowed cost of benefits that are expected to be incurred under the

4

total allowed cost of benefits that are expected to be incurred under the plan

“Affordable” means that the lowest cost “minimum value” plan offered does not exceed 9.5% of annual household income

Safe harbor rules allow employers to use W-2 wages or other options

“Full Time” for Coverage Purposes

Assuming that your agency is an “applicable large employer”

Then each “full-time” employee (and dependents) must be offered coverage of “minimum value” that is “affordable” or penalties may result

“Full time” is defined as working, or hired and reasonably expected to work, at least 30 hours per week or 130 hours per month:

(52 weeks x 30 hours)/12 months = 130 hours per month

5

(52 weeks x 30 hours)/12 months = 130 hours per month

“Full Time” for Coverage Purposes

“All other employees” – part time, temporary, substitute, variable hour, seasonal – based on their hours of service during a “standard measurement period,” otherwise referred to as a “look back period”

If employee’s hours of service averaged at least 30 per week or 130 per month during the standard measurement period

Then the employee is eligible for benefits during the coming

6

Then the employee is eligible for benefits during the coming “stability period”

“Full Time” for Coverage Purposes

Standard measurement period is determined by employer

Can be anywhere from 3 to 12 consecutive months

Stability period must be at least six months and no shorter than the standard measurement period

In recognition of the administrative time required to look back and measure employee hours and then get eligible employees enrolled in benefits, an

7

employee hours and then get eligible employees enrolled in benefits, an “administrative period” of up to 90 days is allowed

In between the standard measurement period and the stability period

“Full Time” for Coverage Purposes

For new employees, the stability period must be at least as long as for ongoing employees

But the measurement period and administrative period may be shorter for the first year – the initial measurement and administrative periods do not have to follow the calendar for ongoing employees

Must be completed by the end of the month following the

8

Must be completed by the end of the month following the one-year anniversary of the hire date

Example: Hired on May 10 of year 1 – the combined initial measurement and administrative periods cannot go past June 30 of year 2

This is shorter than what is allowed for ongoing employees – up to 12 months for measurement and 90 days for administration

“Full Time” for Coverage Purposes

Special rules for educational institutions

Employees are not “seasonal” due to school breaks

Hours must be averaged over employment breaks

Employment break is defined as a period of at least four consecutive weeks

Adjunct faculty at community colleges:

9

Adjunct faculty at community colleges:

Must use a “reasonable method for crediting hours of service” relative to that of full-time faculty

Must include not only credit hours of instruction but also other expected hours – office hours, preparation time, etc.

Must credit at least 2¼ hours total for each hour of teaching, to represent preparation and grading time

Plus additional time for office hours or other required activities

Potential Penalties

There are three potential penalties:

A penalty for not offering coverage to more than 5% of employees (for smaller employers, more than five employees) that qualify as full time

For 2015, if 100 or more employees, must offer to at least 70%

A penalty for offering coverage that does not meet the “minimum value” test

10

test

A penalty for providing coverage that does not meet the “affordable” test

Penalties only apply if at least one employee purchases coverage through the Exchange and receives a subsidy or tax credit

To qualify for a subsidy, the employee’s household income cannot exceed 400% of the federal poverty level

Depends on the size of the family

Potential Penalties

2014 Poverty Guidelines (48 Contiguous States)

Number in Family Poverty Guideline 400% of Poverty Guideline

1 $11,670 $46,680

2 $15,730 $62,920

11

2 $15,730 $62,920

3 $19,790 $79,160

4 $23,850 $95,400

5 $27,910 $111,640

6 $31,970 $127,880

7 $36,030 $144,120

8 $40,090 $160,360

(add $4,060 for each additional person beyond 8)

Potential Penalties

Penalties are determined and assessed on a monthly basis:

12

Preparing for Implementation

Employers will need to do some analysis in order to prepare for the implementation of these provisions:

Are you an “applicable large employer”? If not, then stop here

Do you have 100 or more full-time equivalent employees?

Are substantially all employees that qualify as “full time” offered coverage?

13

Employer must determine standard measurement, administrative, and stability periods

Implement a mechanism to track and measure employee work hours to determine whether they become eligible to be offered coverage

Preparing for Implementation

When counting hours of service, be sure to include all assignments for each individual employee

Important to get this right because the penalty is assessed for all employees (minus the first 30)

Are plans at least offering “minimum value” coverage, and is the employee’s contribution to the premium for individual coverage under the

14

employee’s contribution to the premium for individual coverage under the lowest cost plan “affordable”?

If not, then assess the cost/benefit of offering an affordable option versus paying potential penalties when an employee goes to the Exchange and qualifies for a subsidy

Collective Bargaining Implications

Review heath benefit language in collective bargaining contracts to ensure compliance with the ACA:

Is coverage offered to employees working at least 30 hours per week or130 per month?

Is coverage also offered to dependents?

Is there a plan offered that meets the “minimum value” test?

15

Is there a plan offered that meets the “minimum value” test?

And do employee contributions for individual coverage under that plan meet the “affordable” test?

Collective Bargaining Implications

Are the measurement, administrative, and stability periods negotiable?

The regulations say that the employer decides

How will this impact your strategy for staffing with part-time employees?

The bottom line:

Do the cost/benefit analysis of coming into compliance and develop your

16

Do the cost/benefit analysis of coming into compliance and develop your strategy early

Initial measurement periods are likely happening now!

Long Beach City College (LBCC)

Disclaimer

The information in the next section is based upon LBCC’s assessment of our current collective bargaining language, administrative regulations, and current hiring practices

Implications for your District may differ based upon your administrative regulations, collective bargaining agreements, and hiring practices

17

regulations, collective bargaining agreements, and hiring practices

You should consult with your legal counsel before adopting any of the following business practices

Affordable Care Act Analysis

Analysis of current practice

Hiring guidelines

Stipends

Athletic Coaches

67% (Education Code) and how it relates to ACA regulations

18

67% (Education Code) and how it relates to ACA regulations

Preparation time/grading/office hours (part-time faculty)

Current employee trends

Classified limited-term employees

Benefits analysis (affordable, employee and dependents, Cadillac)

Notices

Affordable Care Act Plan

Designed plan to meet the ACA requirements

Provide training to administrators on requirements of law

Examine district hiring policies/practices

Review current benefit structure

Examine how employees are currently used districtwide

19

Examine how employees are currently used districtwide

Examine and create new business processes to support the ACA

Create a new employee tracking system (PeopleSoft) for auditing

Hire a Human Resource (HR) Analyst to calculate weekly hours of service and provide daily guidance to Instructional Deans for approval of assignments and substitutes

Affordable Care Act Implementation

Actions taken

Vice Presidents, Deans, and Department Heads trained by HR

Mandatory notice sent by Payroll (September 2013)

Audit binder created by HR

Reporting tool for audit purposes created and currently being tested by IITS

20

Reporting tool for audit purposes created and currently being tested by IITS

Board approval of Safe Harbors (may be a negotiable item)

Forms created

Stipend request

Temporary employee

Professional experts

Monthly reporting and analysis underway

Classified Employees

Permanent Classified Employees

Master Agreement provides benefits at 20 hours or greater

Temporary Classified Employees (Limited Term)

Limited to 6-month assignment (Merit System)

Exempt from the Classified Service

21

Exempt from the Classified Service

Limited to 19 hours per week in most cases

Substitutes

No longer permitted to substitute for duration of absent employee – limited to six months

Dual assignments

Prohibited (blended rate in spring 2012)

Part-Time Faculty

Instructional faculty limited to a 67% assignment (per Education Code) for fall, spring, winter, and summer sessions

Note: 67% Rule (Education Code) is a different analysis than the ACA and must be analyzed in addition to ACA requirements

ACA hours for classroom teaching calculated by the number of weekly lecture hours listed in a college catalog for each course (then add 1.25 hours for each

22

hours listed in a college catalog for each course (then add 1.25 hours for each lecture/lab hour to account for preparation and grading) plus office hours and other required duties

Counselors, Librarians, and Instructional Specialists are limited to 21 hours per week (no additional calculation needed unless the faculty member is teaching in the classroom)

No double or triple classes can be offered to part-time faculty during Winter Intersession/Summer Session (or as substitutes)

Part-Time Faculty/Substitutes

Instructional faculty working a 67% assignment (per Education Code) during any semester could exceed the ACA weekly limit due to substitute assignments

ACA hours for classroom substitute teaching is calculated by the number of weekly lecture hours (then add 1.25 hours for each lecture/lab hour to get attributed hours)

Long-Term Substitutes (LTS) and his/her dependents are given benefits for one

23

Long-Term Substitutes (LTS) and his/her dependents are given benefits for one year or one semester of full-time teaching

LTS will become increasingly more advantageous given ACA restrictions

LTS are now required to be benefitted (employee plus dependents only)

An LTS must be used in accordance with Education Code requirements

Counselors, Librarians, and Instructional Specialists are limited to four substitute hours per week if subbing for non-instructional assignments

Part-Time Faculty/Substitutes

Strategies for addressing substitute needs within a department

Immediately increase the number of approved part-time faculty to teach in each discipline in order to have part-time faculty who are approved and available to serve as substitutes when substitutes are needed

Have a number of part-time faculty in the discipline that have a less than 67% assignment who can be made available to serve as substitutes

24

assignment who can be made available to serve as substitutes

Work with department heads from other area community colleges to recruit and hire part-time faculty from their college who can serve as emergency substitutes for LBCC

A part-time faculty member who currently has a 67% assignment may only be used as a substitute instructor upon approval

Depending upon the calculation, a part-time instructor working less than a 67% assignment may be eligible to substitute, but you will have to verify the hours

Part-Time Faculty Stipends

All stipends need to be converted to hours per week and an hourly rate

A stipend form needs to be completed and signed by the employee prior to the start of the assignment

LBCC’s stipend form includes the following information:

Total stipend amount

25

Description of assigned duties

Estimated number of weeks to complete assignment

Hours per week

Signature of Dean/Area Manager

Signature of employee agreeing to terms and conditions of stipend assignment

NOTE: Stipend hours must be added to teaching hours for ACA calculation

Athletic Coaches

Part-time Head Coaches

Permitted to work one Inter-collegiate Athletics Class per semester(11 weekly lecture hours x 2.25 = 24.75)

Develop a signed (annual) employment contract for stipend amount to define duties and compensate each coach for ancillary coaching duties over a 12-month period

26

over a 12-month period

No real solution other than to provide benefits if they teach and coach

Part-time Assistant Coaches

No teaching assignments

Professional expert hours not to exceed 25 hours per week

Negotiations Implications

Providing benefits to classified employees working beyond ACA limits

Stipend amount for part-time head coaches

Safe Harbor (Look Back) period may be negotiable depending on how you are using it (if you use it as a determination for who qualifies for benefits it would be negotiable); if used to assess how many full-time employees the District has it would not be negotiable

27

it would not be negotiable

Thank You!Thank You!