PPACA Compliance Made Easy

PPACA COMPLIANCE MADE EASYA webinar discussing new healthcare reform laws and how to use the right tools to proactively manage the requirements in 2015 and beyond.

Information is general. No legal advice is provided or intended.

SPEAKERS

Brittany is Director of Communications for Stahl & Associates for the past three years. She focuses primarily on employee communication within a benefits program, and specializes in Consumer Driven Health Plan communication, wellness programs, and compliance particularly pertaining to legislation and Health Care Reform.

MJ is a Marketing Content Manager at DATIS and graduated from The University of Tampa. She is presently responsible for focusing on marketing content, communications, and creating campaigns for DATIS’ ongoing marketing efforts.

Brittany Stahl, Stahl & Associates Insurance

MJ Craig, DATIS


TOPICS TO BE COVERED

New reporting requirements for 2014 and beyond Using analytics and reports to get the right metrics for

compliance Preparing DOL Audits Gaining a more holistic view of your workforce Effectively communicating with your employees about benefit

plans Tools to use to maintain compliance

Brittany Stahl

INDIVIDUAL MANDATE

Beginning in 2014, all individuals will be required to have health insurance. Those who do not comply will pay a tax penalty based on income level. The penalty is the greater of: 2014: $95 per uninsured person or 1% of the household income over

the filing threshold 2015: $325 per uninsured person or 2% of the household income

over the filing threshold 2016: $695 per uninsured person or 2.5% of the household income

over the filing threshold


INDIVIDUAL MANDATE

An individual may qualify for federal premium assistance (exchange subsidy) if their income is less than 400% of the federal poverty level (approx. $94,200 for a family of four)

An offer of coverage by an employer that meets the affordability and minimum value standards disqualifies the employee from receiving federal premium assistance to purchase coverage through the public exchange


PAY OR PLAY MANDATE

Applicable Large Employers (over 100 full-time and full-time equivalent employees in 2015, over 50 full-time and full-time equivalent employees in 2016) must provide minimum value health coverage that is affordable to all full-time employees and their dependents under age 26. 2015: must offer it to 70% of full-time employees & dependents

Employers 100+ 2016: must offer it to 95% of full-time employees & dependents

Employers 50+

Coverage provided must meet a minimum actuarial value – meaning that the plan pays at least 60% of the cost of covered services

Coverage must be affordable – the employee premium contribution for single coverage cannot exceed 9.5% of the employee’s household income


PAY OR PLAY MANDATE

For non-calendar year plans, the mandate generally applies with the first day of the 2015 plan year, as opposed to January 1, 2015

Dependent coverage The requirement to cover dependents will not apply for the 2014 plan

year or the 2015 plan year so long as the employer meets the following criteria: The employer did not offer dependent coverage during the 2013

or 2014 plan year The employer is taking steps to arrange for dependent coverage

to begin in the 2016 plan year


SELF SERVICE BENEFITS PORTAL


PAY OR PLAY MANDATE: PENALTIES

If an employer fails to play by not offering minimal value coverage to all full-time employees and dependents, and ONE full-time employee purchases coverage through the exchange and receives federal premium assistance: The employer will pay an annual tax of $2,000 per full-time employee (excluding the first 80 in 2015/ 30 in 2016)

If an employer offers coverage that is not affordable (does not meet the 9.5% threshold), the employer will pay an annual penalty of $3,000 per employee that receives subsidy through an exchange (not to exceed the “no-coverage” penalty).

Insurance is not offered

or is unaffordabl

e

Full time employee obtains

insurance in exchange

The insurance is subsidized

PENALTY+ + =


PAY OR PLAY MANDATE

A full- time employee is one that works 30 hours or more per week. Hours worked by part time and seasonal employees are counted to determine if a company has 50 full-time employees.

Part time employees do not need to be offered coverage, but their hours should be counted to determine if you have over 50 full-time equivalents.

To determine full-time equivalents: Take total number of monthly hours worked by part-time employees and divide by 120.

How do I count employees?

Example: 20 Part Time Employees working 25 hours/week (100 hours/month) 20 employees * 100 hours = 2,000 hours2,000/120 = 16.6 17 Full-Time Equivalent Employees must be added to the already regular full-time employees

(If I had 33 regular full-time employees, I would be considered a large employer)


How DATIS counts employees- monitors employeesFTE Variances CountsAdmin>Position Management>FTE Variances.

You can also use software to track your FTE variances. This is a more accurate and compliant reporting method.

FTE COUNTS AND VARIANCES


PAY OR PLAY MANDATE

Generally not require volunteer hours of “bona fide volunteers” to be counted when determining whether an employer is obligated to provide coverage

Any volunteer who is an employee of a government entity or a 501(c)3 tax-exempt organization whose only compensation from that entity or organization is in the form of (i) reimbursement for (or reasonable allowance for) reasonable

expenses incurred in the performance of services by volunteers, or (ii) reasonable benefits (including service awards), and nominal fees

customarily paid by similar entities in connection with the performance of services by volunteers.

Examples: volunteer firefighters and emergency medical

“Bona Fide Volunteers”


PAY OR PLAY MANDATE

The regulations define a “seasonal employee” as an employee who is hired into a position for which the customary annual employment is six months or less.

The nature of the position means an employee typically works for a period of six months or less, and that period should begin each calendar year in approximately the same part of the year, such as summer or winter.

Seasonal Employees


PAY OR PLAY MANDATE

A new employee who based on the facts and circumstances at the date of hire, it cannot reasonably be determined will be expected to work an average of at least 30 hours per week because their hours are variable or uncertain.

Variable Hour Employees

To determine full-time status, utilize: Measurement Period

Initial Standard

Stability Period Initial Standard

Administrative Periods


PAY OR PLAY MANDATE

Measurement Period: 3- 12 months when an employer looks back on hours worked of an employee to see if they are full-time If the employee works an average of 30 hours over their period, they

should be offered benefits in the stability period There must be a standard measurement period for all employees in

the same category

Administrative Period: Any employee that was deemed full-time has the opportunity to enroll in benefits. Can be no longer than 90 days

Stability Period: Time when the employee receives benefits. Must be at least six months, but cannot be shorter than the measurement period. Even if the employee works less than average of 30 hours/week during the stability period, they are still offered benefits.

Variable Hour & Seasonal Employees


PAY OR PLAY MANDATE

The initial measurement period must start no later than the first day of the month after the date of hire

These employees will not trigger a penalty during the initial measurement period or administrative period

Variable Hour Employees


VARIABLE EMPLOYEE MONITORING Some Human Capital Management software solutions quick, easy,

and compliant ways to track variable employees through their measurement periods.


TAXES & FEESFee Effective Date Plans Affected Summary

Health Insurer Fee 2014 & Beyond Fully Insured Only

Health insurers will have to pay an annual fee to offset at least a portion of the expense related to premium subsidies and tax credits to be made available to qualifying individuals purchasing health insurance coverage on the exchanges beginning in 2014. Health insurers will be assessed a portion of the total industry fee based on their market share – they expect to pay $8 billion in 2014, with it increasing to $14.3 billion by 2018. The employer will see approximately a 2-3% fee built into the renewal.

Transitional Reinsurance Contribution

Premium

2014 – 2016 Fully Insured & Self Funded

Used to fund state non-profit reinsurance entities to help finance the cost of high-risk individuals in the individual market. The fee is $63 per covered life in 2014. For fully insured plans, the fee will be collected through premium rates. Third party administrators will collect the funds for self-insured groups.

Patient – Centered

Outcomes Research Fee

2012 – 2019 Fully Insured & Self Funded

Will be used to fund clinical outcomes effectiveness research. The fee will be $1 per covered life in the plan’s first year that ends on or after 10/1/2012, and will increase to $2 per covered life in 2013. The fee is will be adjusted for medical inflation until 2019. Some carriers will cover this cost for fully insured plans, others will include it in premium. Self insured plans will be required to pay it directly to the IRS by filing a federal excise Form 720.

High – Value Plan Tax 2018 & Beyond Fully Insured & Self

Funded

Fees assessed on high-premium health plans. Plans that cost annually more than $10,200 (single) or $27,500 (family) are subject to a 40% excise tax on the amount above those costs. The amounts are adjusted for cost of living, age & gender, and increases in 2019 and beyond by CPI + 1%.


IRC Section 6055: Insurance companies of fully insured programs and employers with self-insured health programs must report to the IRS each individual for whom they provide minimum essential coverage. Required information includes the individual’s name, address, and SSN. Fully insured groups – insurance company will file Self funded – responsible for reporting

IRC section 6056: All applicable large employers must file annual reports containing the terms and conditions of the health coverage offered to full-time employees in the previous calendar year. They must provide benefit statements to employees to assist them in determining whether they can claim a premium tax credit on their tax return. Fully insured & Self funded groups are required to report this to the

IRS.

REPORTING


BENEFITS ANALYSIS REPORTING Drill down reports provide a complete summary of all employees

enrolled in each benefits plan.


The Department of Labor is currently auditing plans regarding compliance with coverage mandates such as: Age 26 mandate Prohibition of rescissions of coverage Dollar limits on Essential Health Benefits Grandfathered status Choice of Provider Notice (non-grandfathered) Claims and external review (non-grandfathered) ERISA plan document Summary Plan Description & distribution Form 5500

Future DOL & IRS audits will include workforce classification and related issues (not new audit issues, but increased activity due to ACA)

PREPARING FOR DOL AUDITS


Individual Mandate and Penalties Enrolling in the Marketplace – Open Enrollment & Special

Enrollment Periods Subsidy eligibility Marketplace premiums paid post tax Marketplace Notices to new hires Employer Coverage – Actuarial Value & Affordability

Utilize this as a way to promote your benefits and contributions to your employees

COMMUNICATION


Know what voice you are using when you are communicating Plan sponsor, plan administrator, employer

Know whether the communication is legally required Utilize model notices – stay close to the safe harbor model Beware of non-legally required “feel good” communication

Know with whom you are communicating Employees, plan participants, certain groups of employees

Know the issue being addressed, in what context it is being addressed, and stick to the issue Avoid the temptation to over communicate

COMMUNICATION


NECESSARY TOOLS TO USE

Infrastructure needed in place by December 31, 2014 to ensure data is collected in 2015 and beyond

Organization-wide Reporting and Analytics Internal Time and Attendance System Electronic Employee File Record Management Integrated solution for Payroll and Benefits


ORGANIZATION WIDE REPORTING


INTERNAL TIME AND ATTENDANCE


ELECTRONIC EMPLOYEE FILES


INTEGRATED BENEFITS AND PAYROLL


QUESTIONS?

[email protected] I [email protected] I 1.877.386.1355 I @datise3

mailto:[email protected]

mailto:[email protected]

Government & Nonprofit

PPACA Compliance Made Easy