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Executive Vice President Michael Gomes provides the knowledge and insight every business owner should know to remain compliant with the Patient Protection and Affordable Care Act (PPACA). More specifically, the webcast is the first of a two-part series designed to address information these groups need to know on the following topics: • Important dates employers must know to comply with PPACA provisions • Which employee groups should receive health insurance coverage • Union employee rules • Employer “no coverage” and “unaffordability penalties” • Safe harbor rules
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• You are participating in an online webcast today.
• The audio for this webcast will stream through your computer.
• You do not need to dial-in by phone.
• Please make sure your computer sound is turned on and volume is adjusted.
• You can follow us on Twitter during the call @BenefitMall - #PPACAready
PART 1 • DATE
Michael Gomes, Executive Vice PresidentBenefitMall
WELCOME!
REGULATORY COMPLIANCE
PROGRAM
ONGOING BLOGS
WHITEPAPERS & WEBINARS
SEMINARS & TRAINING
PROSPECTANALYSIS TOOL
PAY OR PLAY CALCULATOR
COMPLIANCETOOL KIT
BenefitMallCompliance Suite
WEBINAR OVERVIEW
Attendees will learn about
KEY COMPLIANCE
DATES
EMPLOYEE GROUPS
AUTOMATIC ENROLLMENT & WAITING PERIOD
EMPLOYER PENALTIES
SAFE HARBOR CALCULATIONS
KEY COMPLIANCE DATES
JANUARY 1, 2014
EMPLOYER SHARED
RESPONSIBILITY PROVISIONS
INDIVIDUAL MANDATE
STATE HEALTH BENEFIT
EXCHANGES
EMPLOYER MANDATE COMPLIANCE DATE
• Will my company have to comply with employer-shared responsibility provisions?
• What kind of insurance will my company have to provide?
• To whom will I have to provide insurance?
• What about seasonal, per diem, or part-time employees?
EMPLOYEE GROUPS
A full-time employee is someone employed an average of at least 30 hours of service per week
Employers must make an offer of coverage to at least 95% of its full-time employees and their dependents
FULL-TIME EMPLOYEES
Hours of service include:
EACH PAID HOUR OF WORK: Vacation
Holiday Illness or Leave of Absence
Incapacity Layoff
Jury Duty Military Duty
FULL-TIME EMPLOYEES
• Includes any employee who does not fall
under the full-time designation
• Will be included in calculation to determine whether employer is an applicable large employer, and thus subject to employer shared responsibility requirements
• Employers will not have to make an offer of health coverage to these employees
PART-TIME EMPLOYEES
• PER-DIEM: can be counted as full- or part-time depending on average hours of service worked
o If employee is not paid on hourly basis, calculate hours worked using: actual hours from records, days-worked equivalency, or weeks-worked equivalency
OTHER CATEGORIES OF EMPLOYEES
• SEASONAL: critical in determining whether an applicable large employer may claim an exception from employer shared responsibility requirements based on seasonal workers
OTHER CATEGORIES OF EMPLOYEES (cont.)
• UNION: to date, union workers are not treated as distinct entity in determining whether or not to offer coverage
OTHER CATEGORIES OF EMPLOYEES (cont.)
AUTOMATIC ENROLLMENT & WAITING PERIOD
• Employers that are subject to the Fair Labor Standards Act, and have more than 200 full-time employees, must automatically enroll new full-time employees
• Employer must also provide adequate notice and the opportunity for the employee to opt out
AUTOMATIC ENROLLMENT
• For plan years beginning on or after January 1, 2014, a group health plan or health insurance issuer offering group health insurance coverage shall not apply any waiting period that exceeds 90 days
o If the employee takes additional time to elect coverage, the employer will not be penalized
90 DAY WAITING PERIOD REQUIREMENTS
• IF a group’s health plan conditions eligibility on an employee regularly having a specified number of hours of service per period (or working-full time),
• AND it cannot be determined that a newly hired employee is reasonably expected to regularly work that number of hours per period, (or working-full time) the plan may take a reasonable period of time
• Time not to exceed 12 months and beginning on any date between the start day and first day of calendar month following start day
90 DAY WAITING PERIOD – SAFE HARBOR FOR NEW VARIABLE HOUR
AND SEASONAL EMPLOYEES
• The employer may take a reasonable period of time to determine if the employee meets the plan’s eligibility condition
• Coverage must be made effective no later than 13 months (and a fraction of one month) after the employee’s start date
90 DAY WAITING PERIOD – SAFE HARBOR FOR NEW VARIABLE HOUR
AND SEASONAL EMPLOYEES (cont.)
• Group health plan provides that employees are eligible for coverage after one year of service.
• In this example, the plan's eligibility condition is based solely on the lapse of time.
• Therefore, it is impermissible because it exceeds 90 days.
90 DAY WAITING PERIOD – EXAMPLE
EMPLOYER PENALTIES
The Patient Protection and Affordable Care Act (PPACA) requires most large employers offer affordable minimum essential coverage to their full time employees, or pay a monthly tax penalty.
EMPLOYER PENALTIES: OVERVIEW
• If at least one full-time employee receives a premium tax credit, the employer will be assessed a monthly penalty equal to the number of full-time employees, minus the first 30, multiplied by one-twelfth of $2,000 any applicable
NO COVERAGE
• Example:
o Employer has 80 full-time employees, does not offer coverage. One is certified to receive a tax credit.
o 80 full-time ee – 30 x ($2,000 x 1/12) = $8,333.33 per month
NO COVERAGE
• Coverage exceeds 9.5% of employee’s income
• Coverage does not pay for at least 60% of covered health care expenses
• Penalty would be for each employee who receives coverage
UNAFFORDABLE/INADEQUATE COVERAGE
• Example:
o Employer has 80 full-time employees, offers coverage that does not meet affordability requirements.
o 30 employees receive credits for coverage x
($3,000 x 1/12) = $7,500
UNAFFORDABLE/INADEQUATE COVERAGE
SAFE HARBOR RULES
1. Form W-2 Safe Harbor
2. Federal Poverty Line Safe Harbor
3. Rate of Pay Safe Harbor
COVERAGE SAFE HARBOR
• Standard measurement period for ongoing employees: 3 to 12 months• Determine whether employee worked an average of 30 hours per week
during that periodo YES: treat employee as full-time during subsequent stability periodo NO: may treat employee as part-time during subsequent stability period
Stability period must be at least 6 months, but cannot be shorter than the standard management period
STANDARD MEASUREMENT PERIOD
ADMINISTRATIVE PERIOD
STABILITY PERIOD
LOOK-BACK PERIOD
1. Collectively bargained employees and non-collectively bargained employees
2. Salaried and hourly employees
3. Employees of different entities
4. Employees located in different states
EMPLOYEE LOOK-BACK CATEGORIES
CONCLUSION
• Next Webinar will focus on:
o W-2 Issues
o Control Group Rules
o Exchanges/Subsidies
o Equivalency Test
o Essential Health Benefits and Covered Costs
FINAL THOUGHTS
For additional health care Reform updates, please monitor:
• www.benefitmall.com• www.healthcareexchange.com• www.compupay.com
Q & A