Patient Protection and Affordable Care Act

(PPACA)

Information for UND Departments and Employees

Presented By:

Pat Hanson, Director, Human Resources

November 2014

Topics to be CoveredAffordable Care Act (ACA)

OverviewACA DefinitionsCost/PenaltiesACA TimelineCalculation of EligibilityNext StepsGoing ForwardQuestions

Affordable Care Act Provisions

Guaranteed Issue/Individual Mandate

Benefit and Cost Sharing Standards

Public Exchange AvailabilityConsumer Subsidies based on

incomeEmployer “Mandate” (Shared

Responsibility)

Guaranteed IssueThe law requires insurance

companies to provide what is called "guaranteed-issue" coverage, meaning that insurers can not deny coverage based on past illnesses or current health conditions.

Individual Mandate Beginning January 1, 2014, the Affordable Care Act

(ACA) requires individuals, who are not exempt, to either maintain minimum essential health insurance coverage for themselves and any nonexempt family members or be assessed a tax penalty:

◦ 2014 – $95 per uninsured person or 1 percent of household income over the filing threshold (whichever is greater)

◦ 2015 – $325 per uninsured person or 2 percent of household income over the filing threshold (whichever is greater)

◦ 2016 – and beyond, $695 per uninsured person or 2.5 percent of household income over the filing threshold (whichever is greater)

◦ 2017 – going forward, the penalties will be increased by the cost-of-living adjustment

Benefit and Cost Sharing StandardsStandardized essential health

benefits must be provided by all plans (exception for grandfathered health plans-NDPERS)

Standardized cost sharing of health benefit costs between insured and the insurance company ◦Services must be covered at specific

cost sharing rates – Certain preventive care services must be covered in full

Public Exchange AvailabilityThe Affordable Care Act (ACA) introduces a

new option for small business employers and individuals to access health insurance, Health Insurance Marketplaces, also called Exchanges.

The next open enrollment period for plans offered through the Individual Marketplaces starts Nov. 15, 2014, and ends Feb. 15, 2015.

To qualify for subsidies, the individual may not be eligible for affordable health care through their employer

Employer “Mandate” (Shared Responsibility)All employers with 50 or more

full-time equivalent (FTE) employees must provide adequate, affordable health insurance to substantially all FTE employees or pay a penalty per full-time employee per year. Coverage must be offered to the employee and dependents (Not spouse).

State of North Dakota – One Employer For ACA PurposesDetermination has been made

that State Agencies and NDUS are ONE employer for calculation of hours worked and penalties

When calculating which employees have worked an average of 30 hours or more per week, employment at all State Agencies and NDUS institutions must be included.

Definition of FTE EmployeeFull-Time Employee – Benefited (working in a

regularly funded position, 20 hours or more per week and at least 20 weeks per year)

Variable Hour Employee* – Non-benefited employee anticipated to average 30 or more hours per week (130+ hours per month/1560+ hours per year) upon hire or during the measurement period

Seasonal Employee* – Employed during same season each year, that is more than six months in duration and works more than 1560 hours per year

*Includes non-work-study student employees

Current Cost of Health Insurance Coverage Per Temporary FTE

Employee: $1,108.00 per year ($46.19/pp)Employer: $4,564.88 per year (~$190/pp)

Cost is for a single premium only. Employee may purchase dependent coverage at their own expense (Does not cover spouse) – Add’l Cost - $6,107.28.

Policy is the same NDPERS policy offered to benefited employees.

If employee qualifies for coverage during the measurement period, they will remain eligible for the next plan year, as long as they remain employed, regardless of the number of hours worked.

Potential Employer PenaltiesMust offer coverage to 70% of FTE

employees in 2015 and 95% in 2016

Not offering coverage to 70/95% eligible employees AND at least one eligible employee receives a tax credit/subsidy◦$2,000.00 per FTE employee

Offers coverage to 70/95% eligible employees AND at least one eligible employee receives a tax credit/subsidy◦$3,000.00 per FTE employee who qualified for a

subsidy

Initial ACA Timeline for NDUSMeasurement Period: 11/1/2013-

10/30/14◦Hours of non-benefited employees

(including non-workstudy students) will be tracked to determine if they will be offered ACA Health insurance effective January 1, 2015

Administrative/Open Enrollment Period: 11/1/2014-12/31/2014

Plan Year (Stability Period): 1/1/2015 – 12/31/2015

Measurement PeriodNovember 1 – October 31Eligible employees must have worked an average of

30+ hours per week/130+ per month/1560+ per year)

All hours worked by a current temporary employee will be counted-even hours worked as a benefited employee

Hours worked prior to a six month break (or a break that exceeds previous time worked) will not be included in annual total

Weeks during breaks of 4 weeks to 6 months will not be included in the calculation of average hours worked

Calculating Hours WorkedNon-benefited Instructors

◦ Hours worked per week will be calculated using 2.67 hours per each hour of teaching or classroom time (includes class preparation time, classroom time, grading papers and additional required meeting & office hours)

◦ Contracts should include all classes taught and hours worked

◦ Hours worked per week will be calculated on a semester or contract basis. FTE/Standard Hours will be updated in HRMS to match the results of that calculation

◦ All Additional Pays MUST have hours worked filled in, if it is payment for additional hours worked

◦ Look Back Period: Additional Pays without hours listed, will need to have hours calculated.

Calculating Hours (cont’d)Non-benefitted Coaches

◦Part-time coaches for recognized sports will be automatically eligible for ACA coverage

◦Other part-time coaches may be eligible depending on average number of hours worked.

Graduate Students◦Restricted to working a maximum of 20

hours per week-Ineligible for ACA◦Supervisors must be reminded of this

restriction◦Offered Graduate Health Insurance

Calculating Hours (cont’d)Resident Assistants

◦ACA eligibility dependent on actual number of hours worked

Student Employees (Non-Workstudy)◦ACA eligibility dependent on actual

number of hours worked

Workstudy Employees◦Not eligible for ACA

Next StepsHuman Resources is currently calculating hours

worked by non-benefitted employees during look back period.

Employees eligible for ACA Health Insurance will be notified in writing and offered health insurance

Eligible employees must waive or accept coverage in writing by December 5, 2014

Effective December 15, 2014, ACA eligible employees will pay their semi-monthly premium through payroll deduction and employer share will be paid through employer deduction-charged to salary funding source

ACA coverage will remain in effect for 12 months, as long as they are still employed.

Going ForwardAlways include hours on Additional paysBe aware of number of hours worked by

temporary employees – any employees hired to work more than an average of 30 hours per week will be eligible for ACA coverage upon employment

Be aware of current employment by applicants - when hiring, ask if they have been, or are currently working, for another State Agency or NDUS institution

Last department hiring will be charged ER shareDepartments CANNOT encourage/ask ACA

eligible employees to waive coverage

Annual Offer of CoverageLook back period for 2016

started November 1, 2014Determination of ACA eligibility

for all variable hour temporary employees will occur upon hire, 12 months after hire and then at the end of each Measurement period

Offers/Waivers must be completed on an annual basis

Questions?