healthcare reform: a practical and strategic look at the impact
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These slides cover the information below. You can also view the live recording of this video here: https://vimeo.com/69172281 - What we know today about healthcare reform - Healthcare reform's impact on payroll, HR, and benefits - Notice of Exchanges - Updated COBRA notice - Employer mandates - Wage and hour update - Areas of focus for 2013 and beyondTRANSCRIPT
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Healthcare Reform: A Practical and Strategic Look at the Impact
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19821982
Sikich Gardner & Co. was formed; takes up residence in
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19981998
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20122012
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Healthcare Reform:A Practical and Strategic Look
at the Impact
What Do We Know Today?• Healthcare reform is here to stay• Healthcare reform is very confusing• Guidance is coming out regularly, but there are still many unknowns• Administrative burden will likely be very significant
Healthcare Reform’s Impact on Payroll/HR/Benefits
HR/Benefits Payroll
A Practical Look at Healthcare Reform: What’s on My To-Do List?
Notice of Exchanges• Must be provided to current and all newly hired employees starting no
later than October 1, 2013.
• Must inform employees of the following:
• The existence of the government-run health care exchanges including a description of the services provided and instructions for contacting an exchange to request assistance.
• If the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of the costs, employees may be eligible for a premium tax credit if they purchase a qualified health plan through an exchange.
• If employees purchase a qualified health plan through an exchange, they may lose the employer contribution (if any) to any health benefits plan the employer offers. All or a portion of this contribution may be excluded from income for federal income tax purposes.
Updated COBRA Notice• COBRA Model Election Notice revised to inform qualified
beneficiaries of coverage options available through government run health care exchanges under PPACA
• Employers will now give employees the option of choosing COBRA or going to Exchanges
• The updated Model notice can be found here: http://www.dol.gov/ebsa/cobra.html
Who is a Large Employer?• Employed 50 full-time employees on business days in the preceding
calendar year• Add up total number of hours worked in a month by part-time
employees, divide by 120 and add to full-time employees• Add up number of employees for each of the 12 months and divide
by 12 – if greater than 50, then you are considered a large employer for the current year
• Transition relief is provided for the 2014 calendar year – employer may choose a six-month period in 2013 only
Who is a Large Employer?• Seasonal/variable worker exception:
• (1) an employer’s full-time employee workforce (including FTEs) exceeded 50 employees on only 120 or fewer days, and
• (2) seasonal workers were the only reason the 50-employee threshold was exceeded during this period. This exception may also be applied on the basis of 4 or fewer calendar months.
Who is a Full-time Employee?• Under healthcare reform and for determining the penalties, full-time
is defined as 30 hours per week or 130 hours per month• More clarity may be needed when an employee is hired
regarding employment status• Full-time• Part-time• Variable/Seasonal
• Organizations will have to closely monitor those hired to work less than 30 hours
Employer Mandates• Employers (with 50 or more full-time/full-time equivalents) must:
• Offer minimum essential coverage to at least 95% of full-time employees and children under age 26 OR
• Pay $2,000 penalty per year per full time employee (minus up to 30 full-time employees)
Employer Mandates• If an employer offered coverage and it is not both:
• Qualifying – offers minimum actuarial value of 60%• Affordable – doesn’t cost employee more than 9.5% of income
• Employer pays $3,000 per year, per employee who:• Doesn’t receive qualifying and affordable coverage AND• Is not enrolled in minimum essential coverage AND• Obtains insurance from the exchanges AND• Obtains a subsidy
To “Play” or Not to “Play”?• If your organization decides to “pay” the penalty:
• Penalties are not tax deductible• Reporting requirements still exist• Determining exact numbers of employees can be difficult• Not offering benefits may affect recruitment and retention
Seasonal/Variable Employees• Track hours over measurement period – 3 to 12 months• Get things in order during brief administrative period• Offer coverage to those emerging with at least 30 hours per week in
a stability period
The Payroll Perspective• Each system is different and has varying capabilities• Think about what you will need your system to do going forward• Work with your current payroll system to make changes for tracking
and reporting• Begin thinking about process to deal with administrative burdens
Questions to be Asking• How will my payroll system handle:
• Tracking of hire dates (multiple hire dates, rehires)
• Tracking of unpaid absences• Documentation of employment status• Reporting of hours worked
• Full-time equivalents• Managing hours worked
• Tracking of measurement periods and stability periods
• Automatic enrollment
Questions to be Asking• What is the actuarial value of my current plan?• Is my plan affordable under the affordable care act?• What are my options to minimize the cost to my organization?
A Strategic Look at Healthcare Reform
A Strategic Look at Benefits• How do your benefits factor in to your total rewards package?• How are your benefits used to attract/retain top talent?• How do your benefits compare to the competition?• How will benefit changes impact your total rewards/compensation?• Do your employees understand the full value of the benefits you are
providing?
Planning/Workforce Analysis• Staffing concerns – now and in the future• Managing hours worked, particularly with part-time staff• Impact of changes to work hours
Administrative Concerns• How will your organization determine measurement periods,
administrative periods and stability periods? • How will your organization track hours to determine eligibility for
part-time/variable employees?• Who will be responsible for handling the additional administrative
responsibilities?• Tracking hours/reporting requirements• Enrollments • Questions
Communication with Employees• Ensure compliance with the various notifications and reporting
requirements• Be able to communicate with employees about the various options
available• Make employees better consumers• Help them understand how to get the most from their benefits
• Be prepared to answer questions• Your organization’s benefit plans• Exchanges
Managing Rising Costs/Focus on Wellness• Promotes healthier lifestyles• Helps recognize potential medical concerns earlier• Keeps premium costs down
Your Focus: 2013 and Beyond• Work with a trusted advisor• Analyze workforce – today and in the future• Determine measurement periods• Consider plan design changes• Make sure payroll systems are set up properly to handle the additional
administrative burdens• Ensure compliance with various notifications and reporting requirements• Focus on employee communications
• Value of the benefits provided• How to get the most from benefits
• Focus on wellness• Healthier lifestyles = reduced costs
• Stay flexible
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Jennifer LollinoVice President
HR Consulting Services630.566.8483
[email protected] www.sikich.com
Joyce GrenisSenior Vice President
HR Consulting Services630.566.8454
[email protected] www.sikich.com
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