Affordable Care ActGet ready for 2015

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Applicable Large Employers must offer an affordable healthcare insurance plan that provides minimum essential value to a percentage of their full-time employees or face a penalty.

◦ Review key concepts related to the Affordable Care Act (ACA)◦ Review ACA features in Millennium (M3) and Payentry◦ Review ACA features MPAY to provide in future enhancements

Agenda

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◦ Review definitions on WebHelp at:http://webhelp.mpay.com/#Millennium3/ACA/ACADefinitions_M3.htm

◦ Step 1 – Determine Applicable Large Employer (ALE) status Use prior calendar year employee counts to determine ALE status for

upcoming year Only for 2015, employers may use consecutive 6 month period of their

choosing from 2014 ALE is required to report to IRS starting at 2015 Year-end

Key ACA Concepts for Employers

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◦ Step 1 (Cont.) ONLY For 2015, employers with 100+ full-time/full-time equivalent

employees subject to play or pay Must cover 70%+ of their full-time employees Exemption for first 80 employees Employers with 50-99 full-time / full-time equivalent employees must file

at year end to claim transitional relief

From 2016 on, employers with 50+ full-time /full-time equivalent employees subject to play or pay

Must cover 95% of their full-time employees Exemption for first 30 employees

Key ACA Concepts for Employers

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◦ MPI_1403: ACA Large Employer Estimate Hours must be recorded in system Setup a code group so only earnings for service hours are counted

ARE NOT service hours: bonus, mileage, union health & welfare benefits ARE service hours: FMLA, Jury Duty, PTO, On-Call Estimates number of Full Time and Full Time Equivalent employees

Why an estimate? IRS requires employers to count employees by calendar month

◦ Proceed to step 2 if: Employer KNOWS they are an ALE Employer thinks they MIGHT be an ALE

Resources for Employers

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◦ Step 2 - Employers must classify employees Do not count 1099 workers Excluded: Volunteers, religious workers, students on work/study Full-time: 30+ hours/week or 130+ hours/month Part-time: Less than above Separate Variable Hour employees and Non-Variable Hour employees

◦ What is “Seasonal” used for? Applies to employees who work full-time hours on only 120 (or fewer) days in

a calendar year because of employer’s seasonal business Employer may take a seasonal worker exemption when determining ALE

status

Key ACA Concepts for Employers

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Month Full-time Employees

Part-time Hours

Full-time Equivalent

Totals Seasonal Employees

Less Seasonal Employees

January 32 1800 15 47 0 47

February 32 1800 15 47 0 47

March 32 1800 15 47 0 47

April 32 1800 15 47 0 47

May 75 600 5 80 45 35

June 75 600 5 80 45 35

July 75 600 5 80 45 35

August 75 600 5 80 45 35

September 32 1800 15 47 0 47

October 32 1800 15 47 0 47

November 32 1800 15 47 0 47

December 32 1800 15 47 0 47

Average 46 11 58 43

Key ACA Concepts for Employers

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Month Full-time Employees

Part-time Hours

Full-time Equivalent

Totals Seasonal Employees

Less seasonalEmployees

January 50 2400 20 70 18 52

February 32 3600 30 62 0 62

March 32 3600 30 62 0 62

April 32 3600 30 62 0 62

May 32 3600 30 62 0 62

June 32 3600 30 62 0 62

July 32 3600 30 62 0 62

August 32 3600 30 62 0 62

September 32 3600 30 62 0 62

October 32 3600 30 62 0 62

November 60 1800 15 75 28 47

December 60 1800 15 75 28 47

Average 38 26 64 58

Key ACA concepts for Employers

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◦ M3: Standard New Hire screen requires ACA Status

Resources for Employers

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◦ M3: Employee ACA Status screen

Resources for Employers

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◦ Payentry: New Hire screen requires ACA Status

Resources for Employers

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◦ Payentry: Employee ACA Status screen

Resources for Employers

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What about all the existing employees in the system?

Resources for Employers

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◦ M3: Employee ACA Status Bulk Update

Resources for Employers (New)

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◦ Does the employer have seasonal workers? Rerun MPI_1403: ACA Large Employer Estimate and include seasonal

◦ If the employer is an ALE, verify each employee’s status

Resources for Employers

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What if I don’t know every employee’s status?

Resources for Employers

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◦ M3: Employee ACA Status Audit

Resources for Employers (New)

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◦ Employee ACA Status Audit demo Non-variable Hour employees

To verify employee is classified correctly for year-end reporting

Newly hired Variable Hour employees To determine employee status and eligibility for benefits Use an initial measurement period tied to hire date IRS allows initial measurement period to start first month after hire date

Ongoing Variable Hour employees To determine employee status and eligibility for benefits for upcoming

plan year Use an ongoing measurement period that is the same for all (similar to a

traditional open enrollment)

Resources for Employers (New)

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◦ Variable hour measurement periods explained

Key ACA Concepts for Employers

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◦ Step 3 – Determine plan affordability for full-time employees Employers may use a “Safe Harbor” method by calculating the employee’s

premium contribution for employee-only coverage in the lowest cost plan that provides minimum essential coverage at no more than 9.5% of the employee’s income.

Only applies to employees who are not eligible for a Federal program such as Medicare, Medicaid, CHIP, etc…

Employer penalties for not offering healthcare insurance are dependent on one or more employee receiving a subsidy when the employee purchases insurance through Healthcare.gov or state marketplace.

Some employers offer multiple healthcare plans Only the lowest cost plan that provides minimum essential value must meet the

affordability test

Key ACA Concepts for Employers

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◦ Step 3 – Determine affordability Two easy ways to calculate

Determine income limit for Federal programs and set employee contribution at 9.5% of that

Federal Poverty Level, varies by state Determine full-time employee with lowest wage and set employee

contribution at 9.5% of that

What income can the employer use to determine that 9.5%? W-2 Box 1 wages Rate of pay

Employers who offer coverage, but make coverage unaffordable to some low wage employees may be subject to an IRS fee for those low wage employees.

Key ACA Concepts for Employers

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◦ Report: MPI_6400: ACA Employer Tool Report

Employees shopping on Healthcare.gov (or state Marketplace) Employees need information about their employer

Resources for Employers

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◦ ALE must start collecting data in January 2015 Employee ACA status information Insurance information

◦ All ALEs will be required to report starting in year-end 2015

◦ IRS has published draft forms and instructions Public comment period closed November 3rd

◦ Forms 1094-C and 1095-C are employer’s responsibility MPAY will be ready to help employers with these forms

◦ Forms 1094-B and 1095-B generally be filed by employer’s insurance carrier

Self insured employers will likely require the plan’s Third Party Administrator to create forms and file on employer’s behalf

Year-End Reporting

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◦ EE ACA Bulk Update

Payentry Update on November 15th

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◦ EE ACA Status Audit

Payentry Update on November 15th

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◦ Enhancements to M3 Employee ACA Status Audit tab 2014-Q4 release Sorting on all grid columns Show those employees with no ACA status record Improved handling of rehires Improve detection of gaps in service

◦ Enhancements to Payentry Employee ACA Status Audit tab Early 2015 Show those employees with no ACA status record Improved handling of rehires Improve detection of gaps in service

Coming Next