health care reform how to get ready now
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Health Care Reform How to Get Ready NowTRANSCRIPT
Health Care Reform How to Get Ready Now
Kristin Kahle
Questions
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May 2013
Health Care Reform
Presented byBenefits Exchange Alliance
Disclaimer• This presentation is not:
• Legal Advice• The Final word on HealthCare Reform• A political opinion
BXA is not a law firm and does not provide legal advice. Before taking any action on this information contained in this presentation, plan sponsors should review this material with internal and/or external counsel.
Kristin Kahle • Kristin is Certified Healthcare Reform Specialist (CHRS), Kristin currently is the Senior Vice
President and General Manager for Benefits eXchange Alliance (BXA), running the San Diego office and Hawaii office. In addition, Kristin is also the Compliance Officer for BXA. Kristin is currently finishing her PhD, in which her dissertation is on Health Care Reform. Degree will be confirmed in 2013.
• Kristin is involved in a variety of professional organizations, including:• National Association for Female Executives• National Association for Women Business Owners• National Association of Health Underwriters• Employee Benefits Council of San Diego (past member)• San Diego Association of Human Resources • Junior League of San Diego• National Women Basketball League, Semi-Pro Basketball League
Key Employer Considerations
Determining Full Time Status
Management of Hours Worked
Employee Communication and Compliance
Coverage Availability
Affordability Determination
Reporting and Reconciliation
Taxes, Fines and Penalties
Key Employer Considerations
Determining Full Time Status
Under PPACA, all employers fall into one of two categories◦ Large: 50 or more FT & FTEPT employees◦ Small: Fewer than 50 FT & FTEPT employees
Under PPACA, the calculation of determining the number of Full Time Equivalent Employees is:
FT + FTE=FTEE
2014: Employer Mandate
Do you offer Coverage? No $2,000 per FTE (minus first 30)
Only applies if one full-time employee receives federal premium assistance for exchange coverage.
Does the plan Provide minimum value?
Is the Coverage Affordable?
No Penalty
No
No
Lesser of:$3,000 per FTE receiving tax credit or
$2,000 per FTE (minus first 30)Only applies if one full-time employee receives federal
premium assistance for exchange coverage.
Yes
Yes
Yes
Key Employer Considerations
Determining Full Time Status
Full Time Equivalent of Part Timers(FTE): Total hours of all part time employees for a month divided by 130 monthly hours40 part timers average 21 hours/week◦ (40 * 21*4wks)/130◦ # of FTE = 26
• Average hours of service per week per calendar month
• Breaks in service• Special rules applicable to
• FMLA• Jury Duty• Teachers/Educational Employees• Rehires
Key Employer Considerations
Determining Full Time Status
A monthly tax for larger employers who:◦ Either don’t offer coverage
Coverage must be offered to the greater of 95% of all Full time employees or all but 5 full time employees
Whose employees would have to pay over 9.5% of their W-2 income for coverage
If any full time employees receive subsidized exchange coverage
Does not offer coverage Offers Health CoverageNo FT employees receive credit for exchange coverage
One or more FT employees receive credits for Exchange coverage
No FT employees receive credits for Exchange coverage
One or more FT employees receive credits for exchange coverage
No penalty # of FT employees- 30 X $2,000 ($166.67)
No penalty Lesser of:$2,000$3,000(-30)
Key Employer ConsiderationsManagement of Hours
Worked
Look-back determination- a defined period of not less than 3 but not more than 12 consecutive calendar months. BXA has a calculator to help with this!
Initial Measurement period- between 3 to 12 months, measures the hours of service completed by the new employee during that period of time. Established by the employer.
Ongoing Employee- employee who has been employed by the employer for at least one complete standard measurement period.
Variable Hour Employee- new employee that hours cannot be determined Administration Period- follows the standard measurement period and may last up to 90 days. Stability Coverage Period- the period after measurement, would be treated as a full-time
employee, regardless of the employee’s number of hours of service during the stability period. 6 months is not shorter in duration than the measurement period.
Seasonal Employee- employer’s workforce exceeds 50 full time employees for 120 days or fewer during a calendar year.
BXA has a solution around these tracking of hours!!
Key Employer Considerations
Coverage Availability
State and Federal Exchanges State of California- 18 plans, metal levels Must offer coverage to greater of 95% FT, all but 5 employees Must offer coverage to dependents of FT employees-
dependent determination Actuarial value at no less than 60% Minimum Essential benefits (6) Essential Health Benefits (10)
Key Employer Considerations
Affordability Determination
An affordable plan is on that does not charge more than 9.5% of an employee’s W-2 earnings for individual coverage
Three safe harbor methods for determining this:◦ W-2 (Post-Year) determination
Perform this calculation using the end of the year actual W-2 (Box1) For Calendar year 2014, the employer would use the W-2 issued in January 2015
◦ Rate of Pay Determination (Real Time) Rate of pay is not reduced by 401k contributions and/or Section 125 Formula- multiple the hourly rate of pay on the first day of coverage
◦ Federal Poverty Level (FPL) Determination Use the FPL for a single individual and rely on the FPL published on the first day of the year for the employee. Use the chart that is applicable to the state in which the employee resides
Key Employer Considerations
Affordability Determination
Employees earning less than 133% of federal poverty level will be eligible for Medicaid (in most states).
Employer is NOT assessed a penalty for Medicaid coverage. Individual/Families with income between 133% and 400% of poverty who
purchase coverage through a health insurance exchange are eligible for tax credit/subsidy.
Employers must make exchange coverage available.
Key Employer Considerations
Reporting and Reconciliation
Keep permanent tax records of monthly status- average of 30 hours per week, or at least 130 hours of service in a month.
Reporting to Exchanges Reporting to Federal Government The IRS will contact employers to inform them of their potential liability and
provide them an opportunity to respond before any liability is assessed or notice and demand for payment is made- Employer Shared Responsibility
Key Employer Considerations
Taxes, Fines and Penalties
Employer reporting of insurance on W-2 Surtax on Investment Income- $200,000 Medicare Payroll Tax- $200,000 Adjusted Gross Income to 10% Flexible Spending Cap Individual Mandate Excise Tax Employer Shared Responsibility Tax Cadillac Tax
Key Employer Considerations
Employee Communication and Compliance
Notice of ExchangeSummary of Benefits and Coverage60-Day Notice of Plan ChangesStatement of Grandfathered Status (gf)Notice of RescissionNotice of Patient Protections and Selection of Providers (non gf)Preventive Care Service for Women (non gf)FSA LimitAnnual LimitsExcessive Waiting PeriodsPre-Existing Condition ExclusionsWellness ProgramsResearch FeesReinsurance FeesAdditional Medicare TaxW-2 Reporting
BXA and KPAHealth Care Reform Toolkit Determining Full Time Status Model Language Notices and Communications to Employees Reporting System and Tracking Variable Hour Packet Monthly Monitoring Software Exchange “Marketplace” Education and Enrollment and Notices 2013 Checklist Past Checklists- 2011, 2012 BXA Health Care Reform Certified Company
Summary
Use a pencil with Health Care Reform- Changes coming frequently Understand employee classification, determine if you could be subject to
expanding health care coverage for additional employees Carriers have responsibility for “compliance” Employers have the responsibility and accountability for executing
Contact Information
Kristin L Kahle, MBA [email protected] 858.455.5700 *7146 858.212.4224 Cell Phone Certified Healthcare Reform Specialist
(CHRS) Compliance Officer
John Gregory [email protected] 845.304.5526