Agenda MEASUREMENT METHODS I. Overview of the ACA o Individual - - PDF document

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

Understanding The Measurement Methods Under Employer Shared Responsibility

Susan L. Grassli, J.D. April 2016

ACA COMPLIANCE

GBS Benefits, Inc. 2 Measurement Methods Under ESR MEASUREMENT METHODS

Agenda

• I. Overview of the ACA
• Individual Mandate
• The Exchange / Health Insurance Marketplace
• Employer Shared Responsibility / Employer Mandate
• Market Reforms
• II. Employer Shared Responsibility
• Introduction, Overview and Review of Steps 1, 2 and 3
• The Measurement Methods
• Monthly Measurement Method
• Look‐Back Measurement Method
• How to Use the Look‐Back Measurement Method
• Standard Look‐Back & Stability Period Method
• Initial Look‐Back & Stability Period Method
• Next Steps
• Overview of 4 Steps to compliance with Employer Shared Responsibility

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 3 Measurement Methods Under ESR

The Basic Parts of the ACA

Market Reforms Employer Shared Responsibility Individual Shared Responsibility Exchanges (Marketplaces) & Subsidies

ACA

OVERVIEW

EMPLOYER SHARED RESPONSIBILITY:

Introduction, Overview and Review of Steps 1,2 and 3

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 5 Measurement Methods Under ESR

Steps to Compliance

ESR: INTRODUCTION

Determine Employer Size

STEP 1

Determine Compliance Date

STEP 2

Determine What will be Offered

STEP 3

Determine Which Employees will be Offered Coverage and When

STEP 4

GBS Benefits, Inc. 6 Measurement Methods Under ESR

Step 1:

Determine Employer Size

Determine Employer Size

STEP 1

Determine Compliance Date

STEP 2

Determine What will be Offered

STEP 3

Determine Which Employees will be Offered Coverage and When

STEP 4

EMPLOYER SHARED RESPONSIBILTY

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 7 Steps to Compliance: ESR & Information Reporting

• An employer must know it’s official size as determined under Employer Shared

Responsibility rules

• Factors when determining size:
• Control groups and affiliated services groups

— Include in count all employees from all entities that are part of the same controlled group or affiliated services group — For more information, see our summary entitled: Controlled Groups and Affiliated Service Groups under Health Care Reform

• Contingent employees

— These are employees associated with temporary or leasing agencies or PEOs — Must make determination under the rules regarding which contingent employees to count — For more information, see our summary entitled: Contingent Workers: Is the Staffing Agency or the Client Employer Liable under the Employer Mandate?

• Full‐time employee equivalents and seasonal employees

— There are specific rules on how to calculate full‐ time employee equivalents — There is a specific definition and rule about seasonal employees and whether to count them in the calculation

Step 1:

Determine Employer Size

EMPLOYER SHARED RESPONSIBILTY GBS Benefits, Inc. 8 Measurement Methods Under ESR

Determine Employer Size

STEP 1

Determine Compliance Date

STEP 2

Determine What will be Offered

STEP 3

Determine Which Employees will be Offered Coverage and When

STEP 4

Step 2:

Determine Compliance Date

EMPLOYER SHARED RESPONSIBILTY

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 9 Measurement Methods Under ESR

• Compliance date varies for Employer Shared Responsibility depending on several

factors

• There used to be one compliance date – January 1, 2014
• Now, there are now several possible effective dates based on employer size,

calendar year v. non‐calendar year plans, past v. current plan changes, and qualification for transition rules

• Summary of Effective Dates
• Large employer (100 or more)

— January 1, 2015 — Possible 2015 non‐calendar year plan compliance date if qualify for transition rule

• Medium employer (50 to 99)

— January 1, 2015 — Possible 2016 compliance date if qualify for transition rule

• Small Employer (under 50)

— No compliance date for Employer Shared Responsibility

Step 2:

Determine Compliance Date

EMPLOYER SHARED RESPONSIBILTY GBS Benefits, Inc. 10 Measurement Methods Under ESR

Determine Employer Size

STEP 1

Determine Compliance Date

STEP 2

Determine What will be Offered

STEP 3

Determine Which Employees will be Offered Coverage and When

STEP 4

Step 3:

Determine What will be Offered

EMPLOYER SHARED RESPONSIBILTY

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 11 Steps to Compliance: ESR & Information Reporting

• There are two possible penalties if employer doesn’t offer an ACA compliant plan
• What needs to be offered to avoid exposure to first penalty
• To avoid the 4980H(a) penalty, large employers must offer Minimum Essential

Coverage (MEC) to substantially all full‐time employees, and their dependents

– A plan offered by an employer is generally MEC – “Substantially All” is defined as 95% of full‐time employees

• What needs to be offered to avoid exposure to second penalty
• To avoid the 4980H(b) penalty, large employers must also offer to full‐time

employees and their dependents a plan that meets:

– Affordability – Minimum Value

Step 3:

Determine What will be Offered

EMPLOYER SHARED RESPONSIBILTY GBS Benefits, Inc. 12 Measurement Methods Under ESR

• To avoid both penalties:
• Offer health coverage to at least 95% of full‐time employees
• Check Minimum Value

— Employer must pay at least 60% of the total allowed covered costs under the

• plan. (This does not relate to the monthly premium but instead most all other

costs).

• Check Affordability

— Monthly premium for single coverage must not exceed 9.66 % of any full‐time employee’s household income. To do this, select one of 3 safe harbors:

» W‐2 method » Rate of Pay method » Federal Poverty Level method

Step 3:

Determine What will be Offered

EMPLOYER SHARED RESPONSIBILTY

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Determine Employer Size

STEP 1

Determine Compliance Date

STEP 2

Determine What will be Offered

STEP 3

Determine Which Employees will be Offered Coverage and When

STEP 4

Step 4:

Determine Which Employees will be Offered Coverage & When

EMPLOYER SHARED RESPONSIBILTY GBS Benefits, Inc. 14 Steps to Compliance: ESR & Information Reporting

• Employees who work full‐time, and their dependents, should be offered coverage
• Full‐time employee = 30 hours per week or 130 average hours per month
• Dependents = employee’s children up through age 26, does not include the

spouse

• Identifying full‐time employees is based simply on tracking and counting hours
• It doesn’t matter how an employer classifies employees for other purposes.

— For example, outside the ACA an employee may be classified as part‐time, temporary, or seasonal, but under the ACA, if an employee works the requisite hours, she will be full‐time and will need to be offered coverage to avoid exposure to possible penalties.

• Tracking hours includes hours actually worked plus other hours for which an

employee is paid. Together, these hours are called “Hours of Service”

Step 4:

Determine Which Employees will be Offered Coverage & When

EMPLOYER SHARED RESPONSIBILTY

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 15 Steps to Compliance: ESR & Information Reporting

• All “Hours of Service” should be counted when tracking
• Count all hours worked

— Hours actually worked — Overtime hours

• Count credited hours

— Hours for which an employee is paid or entitled to payment even when no work is performed

» Examples: vacation, holiday, illness, incapacity/disability, layoff, jury duty, military duty

• If not paid hourly:
• Switch to tracking actual hours of service, OR
• Use Equivalency hours method: Days Worked method or Weeks Worked

method

— Days worked method: 8 hours for each full or partial workday — Weeks worked method: 40 hours for each full or partial work week

Step 4:

Determine Which Employees will be Offered Coverage & When

EMPLOYER SHARED RESPONSIBILTY GBS Benefits, Inc. 16 Steps to Compliance: ESR & Information Reporting

• Counting hours can be done in many ways and some may not create accurate

results if employees work anything other than consistently full‐time or part‐time hours

— To help resolve the issue, regulators came up with a Safe Harbor to help process

• f identifying full‐time employees

— The safe harbor includes:

» the Monthly Measurement method » the Look Back Measurement method

Step 4:

Determine Which Employees will be Offered Coverage & When

EMPLOYER SHARED RESPONSIBILTY

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

EMPLOYER SHARED RESPONSIBILITY:

The Measurement Methods

GBS Benefits, Inc. 18 Steps to Compliance: ESR & Information Reporting

• Safe Harbor includes two Measurement Methods to track hours and identify full‐

time employees

• Monthly Measurement Method
• Look‐Back Measurement Method
• Summary of Monthly Measurement Method
• Count each employee’s “hours of service” during each month
• Employees could go in and out of eligibility for coverage each month
• Summary of Look‐Back Measurement Method
• Track each employee’s “hours of service” during a specified Look‐back

measurement period (usually 12 months). Employees whose hours of service average 130 hours per month are identified as full‐time and have earned coverage for the full Stability Period (the following 12 months)

Step 4:

Determine Which Employees will be Offered Coverage & When

EMPLOYER SHARED RESPONSIBILTY

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 19 Steps to Compliance: ESR & Information Reporting

• General rule when using the Measurement Methods
• Technical Explanation

— Must use same measurement method for ALL employees “in same category” even for full‐time employees with consistent hours — There are only 4 allowed categories wherein an employer can use different measurement methods:

» Salaried v. hourly employees » Employees in different States (primary place of employment) » Collectively bargained v. on‐collectively bargained employees (union) » Each group of collectively bargained employees (union) covered by a separate collective bargaining agreement (union)

— Otherwise, all employees hours of service must be measured using the same measurement method

Step 4:

Determine Which Employees will be Offered Coverage & When

EMPLOYER SHARED RESPONSIBILTY GBS Benefits, Inc. 20 Steps to Compliance: ESR & Information Reporting

• General rule when using the Measurement Methods (continued)
• Simple explanation and approach

— It’s simpler to select the same Measurement Method for ALL categories of employees

» Most opt to use the Look Back Measurement Method for all employees

— This means all the following employees would have hours tracked and counted using the Look Back Measurement Method:

» Full‐time employees » Part‐time employees » Variable hours employees » Seasonal employees » Employees paid with a salary » Employees paid by the hour » Employees at all locations

• Exception:

— Even if an employer chooses the Look Back Measurement Method for all employees, newly hired employees reasonably expected at time of hire to be full‐ time must have their hours tracked and counted, temporarily, using the Monthly Measurement Method

Step 4:

Determine Which Employees will be Offered Coverage & When

EMPLOYER SHARED RESPONSIBILTY

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 21 Steps to Compliance: ESR & Information Reporting

• Exception to the General Rule Explained
• Rule: Must use Monthly Measurement Method for all newly‐hired employees

who at the time of hire are “reasonably expected” to work full‐time

— Employee should be offered coverage within the 90 Day Waiting Period

» This means no later than the first day of the month following 2 months or no later than the 90th day after hire.

— If using the Look Back for ALL categories:

» Monthly Measurement Method is temporary » Employee’s hours are also tracked under Look Back Measurement Method starting with the first Standard Measurement Period after date of hire

• Duration: The Monthly Measurement Method must be used until the newly‐

hired full‐time employee becomes an “ongoing employee”

— Once employee is “ongoing” there is no requirement to use Monthly Measurement — Employee becomes an “ongoing” employee at the end of the first Standard Look Back Measurement period after hire

Step 4:

Determine Which Employees will be Offered Coverage & When

EMPLOYER SHARED RESPONSIBILTY GBS Benefits, Inc. 22 Steps to Compliance: ESR & Information Reporting

• If an employer uses the simple approach
• Simple approach: all employees have hours of service tracked and counted

using the Look Back Measurement Method (except newly hired employees who are reasonably expected to be full‐time would temporarily have hours counted using the Monthly Measurement Method)

• Result is an employer need only deal with three basic categories of employees:

— Newly hired employees reasonably expected at the time of hire to be full‐time — Newly hired employees NOT reasonably expected at the time of hire to be full‐ time — Ongoing employees

Step 4:

Determine Which Employees will be Offered Coverage & When

EMPLOYER SHARED RESPONSIBILTY

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

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Measurement Methods

Example where Employer selects Look‐Back Measurement Method for All Categories of Employees

Step 4:

Determine Which Employees will be Offered Coverage & When

Newly Hired Employee Reasonably Expected to be Full‐time

Newly Hired Employee not Expected to be Full‐time

(and full‐time employees who meet seasonal definition)

Ongoing Employee Monthly Measurement Method Initial Look‐Back Measurement Method Standard Look‐Back Measurement Method

EMPLOYER SHARED RESPONSIBILTY GBS Benefits, Inc. 24 Steps to Compliance: ESR & Information Reporting

• Make sure to correctly place an employee in one of the three categories
• To determine whether a newly hired employee is “reasonably expected” at the

time of hire to be full‐time, the regulations allow an employer to consider various factors such as, but not limited to:

— Is the new employee replacing a full‐time or part‐time employee? — Do employees in comparable positions work full‐time or variable hours? — Was the position advertised as a full‐time or variable hour position? — What do provisions say in the job description or employment contract?

• What about Temporary, Short Term, or Project Employees

— If hired to be full‐time, they are “reasonably expected” to be full time at the time

• f hire. An employer cannot consider the likelihood that an employee will

terminate employment before the end of the initial measurement period.

» For example, an employee who is hired to work full‐time for just six months (in a non‐ seasonal position) should be considered full‐time upon hire.

• What about Seasonal employees

— A newly hired employee reasonably expected to work full time at the time of hours does not need to have coverage offered up front if situation meets the Step 4 definition of seasonal employee

Step 4:

Determine Which Employees will be Offered Coverage & When

EMPLOYER SHARED RESPONSIBILTY

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 25 Steps to Compliance: ESR & Information Reporting

• What if an employee is expected to be full‐time but is hired for a seasonal

position?

• A newly hired employee reasonably expected to work FT hours but who meets

the Step 4 definition of seasonal employee does NOT need hours tracked under the Monthly Measurement method.

— Instead, a FT seasonal employee would go right into the Initial Look Back Measurement Method, and then eventually into the Standard Look Back Measurement Method

• Definition of Seasonal Employee under Step 4

— A position for which the customary annual employment is six months or less.

» “Customary” means: employee typically works each calendar year in approximately the same part of the year, such as summer or winter. » Note this definition is different from the definition of Seasonal Worker under Step 1

— Examples:

» A new employee hired to work FT hours for summer parks and recreation and season typically ends in 5 months is a seasonal employee under Step 4 » A new employee hired to work FT hours for winter ski resort and season typically ends in 6 months is a seasonal employee under Step 4 » A new employee hired FT for “seasonal” work which typically ends in 7, 8, 9, 10, 11 or 12 months is NOT a seasonal employee under Step 4

Step 4:

Determine Which Employees will be Offered Coverage & When

EMPLOYER SHARED RESPONSIBILTY

EMPLOYER SHARED RESPONSIBILITY:

Using the Look‐Back Measurement Method

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 27 Steps to Compliance: ESR & Information Reporting

• Using the Look‐Back Measurement Method
• Generally:

— Measurement Period

» Period of time between 3 and 12 months (usually 12) where employer tracks employee hours of service to determine whether employee is full‐time and eligible for health coverage

— Administrative Period

» Period of time to calculate hours of service, identify full‐time employees and make an

• ffer of coverage

— Stability Period

» Period of time between 6 and 12 months (usually 12) where coverage is effective and employee remains eligible even if hours reduce during this time. Stability Period is same length as Measurement Period

• Two Kinds of Look‐Back Measurement Methods

— Standard Look‐Back Method:

» Method for ongoing employees and eventually, for all employees (assuming an employer selects this method for ALL categories of employees)

— Initial Look‐Back Method:

» Method for newly hired employees

Step 4:

Determine Which Employees will be Offered Coverage & When

EMPLOYER SHARED RESPONSIBILTY GBS Benefits, Inc. 28 Steps to Compliance: ESR & Information Reporting

Measurement Methods

Example where Employer selects Look‐Back Measurement Method for All Categories of Employees

Step 4:

Determine Which Employees will be Offered Coverage & When

Newly Hired Employee Reasonably Expected to be Full‐time

Newly Hired Employee not Expected to be Full‐time

(and full‐time employees who meet seasonal definition)

Ongoing Employee Monthly Measurement Method Initial Look‐Back Measurement Method Standard Look‐Back Measurement Method

EMPLOYER SHARED RESPONSIBILTY

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

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Standard Look‐Back Measurement Method

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Standard Look‐Back Measurement Method

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 31 Measurement Methods Under ESR

SELECT

• Employer selects a “Look‐Back” period, called the Standard Measurement Period
• Length can be anywhere between 3 and 12 months

— Most everyone is using 12 months

• Generally, the Standard Measurement Period must be the same amount of

time and start the same time for all current employees

— Exception: plans may use different Measurement Periods for employees in the following allowable categories:

» Collectively bargained v. non‐collectively bargained employees » Salaried v. hourly employees » Employees of different entities » Employees located in different states

— It is simpler to NOT use these categories and just have the same period for all employees

• The employer can change the selected Standard Measurement period from
• ne year to the next but must complete full cycle before changing (and it will

make things more complicated)

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Standard Look‐Back Method

GBS Benefits, Inc. 32 Measurement Methods Under ESR

SELECT

• Employer also selects a “Stability” period called a Standard Stability Period
• This is the period of time an employee is eligible for coverage if hours over the

Standard Measurement Period average at least 130 hours per month (which is full time under the ACA)

• Rules for selecting the length of Stability Period:

— For employees averaging 30 or more hours per week during Standard Measurement Period, the Standard Stability Period:

» Must be at least six (6) consecutive calendar months, and » Cannot be shorter than the measurement period

— Example: if 12 month Standard Measurement Period then must have 12 month Standard Stability Period

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Standard Look‐Back Method

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 33 Measurement Methods Under ESR

Standard Look‐Back Measurement Method

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TRACK

• Employer tracks the hours the employees work each month during the selected

Standard Measurement Period

• Keep accurate records of each employee’s hours of service
• No specific technology required for tracking
• Benefits of Tracking Hours
• This safe harbor method gives greater flexibility when scheduling and working

employees because employer is allowed to average hours over the entire Standard Measurement Period, not per week or per month

— In other words, during the Standard Measurement period, employees are allowed to work over 30 hours some weeks when needed (and sometimes under 30 when not needed) or over 130 hours some months (and sometimes under 130 hours some months when not needed) — As long as the AVERAGE total hours do not exceed full‐time over the full Standard Measurement Period, there is no need to offer coverage

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Standard Look‐Back Method

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

EMPLOYEE LAST NAME EMPLOYEE FIRST NAME HIRE DATE STANDARD MEASUREMENT PERIOD (12/1/13 – 11/30/14) DECEMBER JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER TOTAL AVERAGE

(TOTAL OF 12 MONTHS DIVIDED BY 12)

A A 2/6/12 73.00 61.00 65.00 40.50 58.00 38.25 99.75 154.50 135.50 65.50 84.00 67.75 942.75 78.56 B B 7/29/13 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.00 72.40 48.25 68.50 50.50 242.65 20.22 C C 7/26/11 0.00 20.00 35.00 8.50 20.00 19.00 74.00 74.00 0.00 0.00 0.00 0.00 250.50 20.88 D D 4/11/13 0.00 0.00 0.00 0.00 96.00 168.00 164.00 156.00 168.00 104.00 0.00 0.00 856.00 71.33 E E 4/11/13 0.00 0.00 0.00 0.00 47.00 35.00 53.50 50.00 41.00 17.00 37.50 38.00 319.00 26.58 F F 12/21/12 24.50 60.00 20.00 30.00 8.00 15.00 49.00 37.00 64.00 38.00 59.00 45.00 449.50 37.46 G G 8/29/11 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.00 0.00 0.00 2.00 0.17 H H 5/7/08 22.50 18.00 49.50 143.50 155.00 175.00 173.00 178.50 157.00 168.00 137.00 112.50 1489.50 124.13 I I 9/26/13 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.00 26.00 32.00 60.00 5.00 J J 3/1/13 0.00 0.00 0.00 29.50 12.00 37.50 0.00 0.00 0.00 0.00 0.00 0.00 79.00 6.58 GBS Benefits, Inc. 36 Measurement Methods Under ESR

Standard Look‐Back Measurement Method

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

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DO THE MATH

• At the end of the Standard Measurement Period, calculate the monthly (or

weekly) average hours for each measured employee

• Add all hours worked during the entire Standard Measurement Period and

divide by length of Standard Measurement Period to get monthly average.

• Examples:

— If the Measurement Period is 12 months, divide the total hours worked in the 12 months by 12 — If the Measurement Period is 6 months, divide the total hours worked in the 6 months by 6 — May calculate a weekly average by dividing total by number of weeks in Measurement Period

• If the employee averages 130 hours or more per month (or 30 per week) the

employee under ACA is a full‐time employee and should be offered coverage to avoid exposure to penalties.

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Standard Look‐Back Method

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Standard Look‐Back Measurement Method

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

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OFFER

• Standard Stability Period:
• If the employee averages 130 hours or more per month

— Employee should be offered coverage — If the Employee opts to take coverage, the coverage should be applicable as of the first day of the corresponding Standard Stability Period — Employer may be penalized for not offering coverage

• If the employee averages less than 130 hour per month

— Employee need not be offered coverage — May be MORE generous than this, and offer to more — Employer will not be penalized for not offering coverage

• How long is the employee eligible?

— Must be eligible for health coverage during the full associated Standard Stability Period, regardless of the hours employees work during the Standard Stability Period — It doesn’t matter if the employee starts working fewer hours during the Standard Stability Period, the employee still earned eligibility for coverage during the FULL Stability period

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Standard Look‐Back Method

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Standard Look‐Back Measurement Method

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

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REPEAT

• The Standard Measurement Period and Standard Stability Period are continuously

repeated

• Immediately after Standard Measurement Period 1 ends, Standard

Measurement Period 2 begins

• Immediately after Standard Stability Period 1 ends, Standard Stability Period 2

begins.

• After the very first Measurement Period 1, every following “Period” is both a

measurement period and a stability period, or at a minimum, they overlap at some point

• For administrative ease, add an Administrative Period
• Not required to have an administrative period, but highly recommended

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Standard Look‐Back Method

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Standard Look‐Back Measurement Method

Administrative Period

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 43 Measurement Methods Under ESR

ADMINISTRATIVE PERIOD

• What: A period of time, usually between the Measurement Period and the Stability

Period, to “do the math” and “offer” coverage

• Purpose: Administrative ease
• Gives employers time to calculate and identify which employees were full‐time

during the Standard Measurement Period and to notify these employees of their eligibility, explain coverage available under the plan, answer questions and collect materials from employees, and enroll those employees who elect coverage

• Rules:
• Once eligible for coverage, the full‐time employee’s waiting period cannot

exceed 90 days

— Typically, employers choose either a 1 month or a 2 month Administrative Period — Example: first of the month following 1 month, or first of the month following 2 months

• May not reduce or lengthen measurement or stability periods
• May not cause a gap in coverage

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Standard Look‐Back Method

GBS Benefits, Inc. 44 Measurement Methods Under ESR USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Standard Look‐Back Method

The general framework for the Standard Measurement Period, Standard Administrative Period and Standard Stability Period MEASUREMENT PERIOD 1 ADMIN PERIOD 1 STABILITY PERIOD 1 MEASUREMENT PERIOD 2 ADMIN PERIOD 2 STABILITY PERIOD 2

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

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ADMINISTRATIVE PERIOD

• Example with an Administrative Period added where:
• Employer selects:

— 12 month Measurement Period — 12 month Stability Period — 2 month Administrative Period — Plan year starts January 1 — Effective date (discovered during Step 2) is January 1, 2015

• Dates of first standard look back cycle
• November 1, 2013 to October 31, 2014 ‐‐ Standard Measurement Period 1
• November 1, 2014 to December 31, 2014 ‐‐ Standard Administrative Period 1
• January 1, 2015 to December 31, 2015 ‐‐ Standard Stability Period 1

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Standard Look‐Back Method

GBS Benefits, Inc. 46 Measurement Methods Under ESR

• When is the STANDARD Look Back Measurement method used?
• Use for ongoing employees:

— Any employee who was hired prior to employer’s first (original ) Standard measurement method period — Any employee who has worked with the employer through one full Standard Measurement Period

• Use for any newly hired employee beginning (or starting with) the first full

Standard Look Back after date of hire

— This is used along with the temporary measurement methods of either: » The monthly measurement method for newly hired employees who at the time of hire are reasonably expected to be full‐time, OR » The Initial look back method for newly hired employees who at the time of hire are NOT reasonably expected to be full‐time

MEASUREMENT METHODS

Step 4: Determine Which Employees will be Offered Coverage & When

Standard Look‐Back Method

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 47 Steps to Compliance: ESR & Information Reporting

Measurement Methods

Example where Employer selects Look‐Back Measurement Method for All Categories of Employees

Step 4:

Determine Which Employees will be Offered Coverage & When

Newly Hired Employee Reasonably Expected to be Full‐time

Newly Hired Employee not Expected to be Full‐time

(and full‐time employees who meet seasonal definition)

Ongoing Employee Monthly Measurement Method Initial Look‐Back Measurement Method Standard Look‐Back Measurement Method

EMPLOYER SHARED RESPONSIBILTY GBS Benefits, Inc. 48 Measurement Methods Under ESR

• When does a newly hired employee become an ongoing employee
• A newly hired employee becomes an ongoing employee at the end of the first

Standard Look‐Back Measurement Period after hire

• At this time, there is no more “dual” measurement methods

— Example of “dual” measurement methods, or using two methods, temporarily, at the same time: » Tracking hours for a newly hired employee NOT reasonably expected at time of hire to

be full time under BOTH the INITIAL Look Back and the STANDARD Look Back » Tracking hours for a newly hired employee reasonably expected at time of hire to be full time under BOTH the Monthly Measurement method and the STANDARD Look Back Measurement method

• At this time and from this point forward, only the STANDARD Look Back

Measurement method will be used

MEASUREMENT METHODS

Step 4: Determine Which Employees will be Offered Coverage & When

Standard Look‐Back Method

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 49 Measurement Methods Under ESR

• When does a newly hired employee become an ongoing employee
• Example:

— Employer elects to apply the Look‐Back Measurement Method to ALL employees — Employer hires an employee who is reasonably expected to work full‐time — Employer tracks the new employee’s hours using the Monthly Measurement Method (and offers coverage within 90 days) — In addition, on day 1 of the first Standard Measurement Period after hire, employer also tracks the new employee’s hours using the Standard Look Back — Employer continues tracking hours using both the Monthly Measurement Method and the Look‐Back Measurement Method until the end of the first Standard Measurement Period. — At the end of the first Standard measurement period after hire, the new employee is now considered an ongoing employee. — Employer now applies only the Standard Look‐Back Measurement Method to track employee’s hours and will continue to do so each year

MEASUREMENT METHODS

Step 4: Determine Which Employees will be Offered Coverage & When

Standard Look‐Back Method

GBS Benefits, Inc. 50 Steps to Compliance: ESR & Information Reporting

Example where Employer uses Look‐Back Measurement Method for All Employees and Standard Look‐Back starts each year on October 1

October 1, 2014: Start Tracking Hours under Look‐ Back Measurement Method (but also continue to measure under monthly measure method)

2014 2015

March April May June July August September October November December January February March April May June July August September October November December

Standard Measurement Period (SMP) October 1, 2015: Becomes ongoing EE March 1, 2014: New Hire

Admin Stability March 1: Start Tracking Hours under Monthly Measurement Method October 1, 2015: employee becomes ongoing

• employee. Stop using Monthly Measurement method

and continue using the Standard Measurement Period

SMP

Transition from Newly Hired Employee “Reasonably Expected to be Full‐time” to Ongoing Employee

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 51 Measurement Methods Under ESR

Initial Look‐Back Measurement Method

GBS Benefits, Inc. 52 Measurement Methods Under ESR

Initial Look‐Back Measurement Method

The Method for Newly Hired Employees is generally the same as the Method for Ongoing Employees, but it is different in some key ways

Standard Look‐Back Measurement Method

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 53 Measurement Methods Under ESR

Initial Look‐Back Measurement Method

GBS Benefits, Inc. 54 Measurement Methods Under ESR

SELECT

• Employer selects a “Look‐Back” period, called a Standard Measurement Period
• Length can be anywhere between 3 and 12 months

— Most are choosing 12 months — May be different length from Standard Method

» However, it will keep things simple if employer chooses same length as Standard Measurement Period

— Length of time must be same length for all new hires whose hours will be temporarily tracked with the Initial Method

• Employer also selects a “Stability” period (post measurement period), called the

Initial Stability Period

• For employees averaging 130 hours per month (or 30 per week) during

Standard Measurement Period, the Standard Stability Period:

— must be at least six (6) consecutive calendar months, and — cannot be shorter than the measurement period — Example: If 12 month Initial Measurement Period, must have 12 month Initial Stability period

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Initial Look‐Back Method

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

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Initial Look‐Back Measurement Method

GBS Benefits, Inc. 56 Measurement Methods Under ESR

TRACK

• Employer tracks the hours the employees work each month during the selected

Initial Measurement Period

• Remember, this method is for newly hired employees NOT reasonably

expected at time of hire to be full‐time

• Date to start measuring begins on or near the employee’s start date
• Each new hire has his/her own unique Initial Measurement Period start date

— This is different from Standard Measurement Period where all current employees are measured on the same dates and over the same period — Cannot wait for the next Standard Measurement Period, must put track hours of service in the INITIAL look back when they are newly hired

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Initial Look‐Back Method

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

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Initial Look‐Back Measurement Method

GBS Benefits, Inc. 58 Measurement Methods Under ESR

TRACK OVERLAP

• In addition to tracking the new employee’s hours during the Initial Measurement

Period, the employer also starts tracking the new employee’s hours during the first Standard Measurement Period that begins after employee’s start date

• The newly hired employee’s hours are tracked during BOTH the Initial

Measurement Period and also during the Standard Measurement Period

— For example:

» Employee A is hired and starts working April 1, so Initial Measurement Period starts April 1. » The Standard Measurement Period for all ongoing employees starts November 1, so employer also starts measuring Employee A on November 1 in the Standard Measurement Period » For a period of time, Employee A will have hours tracked under both methods (Initial and Standard) even though, for a period, the methods will overlap

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Initial Look‐Back Method

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 59 Measurement Methods Under ESR USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Initial Look‐Back Method

The Track OVERLAP for the Initial Measurement Period and the Standard Measurement Period

Initial Measurement Period April 1, 2015 – March 31, 2016 Admin Period April 1 – 30, 2016 Initial Stability Period May 1, 2016 – April 30, 2017 Standard Measurement Period 1 November 1, 2015 – October 31, 2016 Admin Period 1 November 1, 2016 – December 31, 2016 Standard Stability Period 1 January 1 – December 31, 2017 Standard Measurement Period 2 November 1, 2016 – October 31, 2017 Admin Period 2 November 1, 2017 – December 31, 2017 Standard Stability Period 2 January 1 – December 31, 2018 Standard Measurement Period 3 November 1, 2017 – October 31, 2018 Admin Period 3 November 1, 2018 – December 31, 2018 Standard Stability Period 3 January 1 – December 31, 2019

GBS Benefits, Inc. 60 Measurement Methods Under ESR

Initial Look‐Back Measurement Method

Administrative Period Optional Partial Administrative Period

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 61 Measurement Methods Under ESR

• The Initial Administrative Period: An Initial Administrative Period may either be:
• Same as Standard Administrative Period

— In other words, placed after the Initial Measurement Period and before the Initial Stability Period, or:

• Split Administrative Period

— Part 1 of the administrative period is before the Initial Measurement Period and Part 2 of the administrative period is place between the Initial Measurement Period and the Initial Stability Period

• Why split the Initial Administrative Period?
• So all Initial Measurement Periods for new hires start the first day of each

month

• Example: Employer hires a two employees within the same month. Employer

wants to start tracking hours of all employees hired within the same month starting on the first day of the following month (rather than starting a separate day for each employee). Employee A starts 3/12 and Employee B starts 3/23:

— Initial Administrative Period Part 1 for Employee A: March 12 to March 31, 2014 — Initial Administrative Period Part 1 for Employee B: March 23 to March 31, 2014 — Initial Measurement Period for Employees A and B: April 1, 2014 to March 31, 2015 — Initial Administrative Period Part 2 for Employees A and B: April 1 to April 30, 2015 — Initial Stability Period for Employees A and B: May 1, 2015.

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Initial Look‐Back Method

GBS Benefits, Inc. 62 Measurement Methods Under ESR USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Initial Look‐Back Method

The two separate possible frameworks for an Administrative Period associated with an Initial Measurement Period ADMIN PERIOD PART 1 INITIAL MEASUREMENT PERIOD ADMIN PERIOD PART 2 INITIAL STABILITY PERIOD INITIAL MEASUREMENT PERIOD 1 ADMIN PERIOD 1 INITIAL STABILITY PERIOD 1

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 63 Measurement Methods Under ESR

• Special Rule: The Initial Measurement Period and associated Administrative

Period combined may not be longer than 13 months plus a partial additional month

• Generally, the administrative period can be up to 90 days (for Standard Look

Back)

— For the look back method, its helpful to translate into months instead of days

• However, in the INITIAL look back method, a new hire who is being measured

may not wait longer than 13 and a partial months before being eligible for coverage

— This rule affects only Initial Measurement Periods that are 12 months long — For 12 month Initial Measurement Periods, the Initial Administrative Period can

• nly be either 1 month or one and a partial months (not the normal two months)

— Example:

» Initial Administrative Period Part 1 for Employee A: March 12 to March 31, 2014 » Initial Administrative Period Part 1 for Employee B: March 23 to March 31, 2014 » Initial Measurement Period for Employees A and B: April 1, 2014 to March 31, 2015 » Initial Administrative Period Part 2 for Employees A and B: April 1 to April 30, 2015. Note that This administrative period may ONLY be one month » Initial Stability Period for Employees A and B: May 1, 2015.

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Initial Look‐Back Method

GBS Benefits, Inc. 64 Measurement Methods Under ESR

Initial Look‐Back Measurement Method

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 65 Measurement Methods Under ESR

DO THE MATH

• At the end of the Initial Measurement Period:
• Add all hours worked during the full Initial Measurement Period and divide by the length
• f the measurement period to get monthly average. Examples:

– If the Measurement Period is 12 months, divide all hours of service in 12 months by 12 – If the Measurement Period is 6 months, divide all hours of service in the 6 months by 6 – May calculate a weekly average by dividing total by number of weeks in Measurement Period

• If the employee averages 130 or more hours per month (or 30 per week)

— Employee is a full‐time employee during the Measurement Period

• Remember to do the same at the end of the Standard Measurement Period:
• Add all hours worked during the full Standard Measurement Period and divide by the

length to get monthly average. Examples:

– If the Measurement Period is 12 months, divide all hours of service in 12 months by 12 – If the Measurement Period is 6 months, divide all hours of service in 6 months by 6 – May calculate a weekly average by dividing total by number of weeks in Measurement Period

• If the employee averages 130 or more hours per month (or 30 per week)

– Employee is a full‐time employee during the Measurement Period

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Initial Look‐Back Method

GBS Benefits, Inc. 66 Measurement Methods Under ESR

Initial Look‐Back Measurement Method

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 67 Measurement Methods Under ESR

OFFER

• When to Offer Coverage
• If the employee averages 130 hours or more per month during the INITIAL

Measurement Period

– Employee should be offered coverage – If the Employee opts in to coverage, the coverage should be effective the first day of the corresponding INITIAL Stability Period

• If the employee averages less than 130 hour per month

– Employee need not be offered coverage – Employer will not be penalized for not offering coverage

• There is only one cycle for the INITIAL Look‐Back method
• There is no need to “REPEAT” process
• If the employee is still working, he/she will be looped into Standard Look‐

Back/Stability Period safe harbor method

• The next time hours are averaged is at the end of the STANDARD Measurement

Period

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Initial Look‐Back Method

GBS Benefits, Inc. 68 Measurement Methods Under ESR

• The Initial Stability Period and Standard Stability Period will overlap but apply

them separately

• Employee should be eligible for health coverage during the Initial Stability

Period if full‐time during Initial Measurement Period

– Make sure coverage is offered for the entire Initial Stability Period

• Employee should eligible for health coverage during the Standard Stability

Period if full‐time during the Standard Measurement Period

– Make sure coverage is offered for the entire Standard Stability Period even if there is overlap with Initial Stability Period

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Initial Look‐Back Method

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GBS Benefits, Inc. 69 Measurement Methods Under ESR

Initial Look‐Back Measurement Method Standard Look‐Back Measurement Method

Additional Rules and Issues for the Look‐Back Measurement Method

Applies to Both the Standard & Initial Look‐Back Measurement Methods

GBS Benefits, Inc. 70 Measurement Methods Under ESR

GENERAL RULE FOR EMPLOYEES RETURNING FROM UNPAID LEAVE

• Issue: For rehires or employees returning from unpaid leave, must the employer

identify and treat them as an ongoing employee or as a newly hired employee?

• In other words, when an employee returns, does employer track hours in the

Standard Measurement Period (ongoing employee) or start an Initial Measurement Period (newly hired employee)?

– This includes any employee who ceases active employment and returns whether

• r not the employee is actually “terminated” from the employer’s record
• Solution: Select one of two special rules when determining whether the employee

is an ongoing employee or a new employee

• 13 Weeks Rule
• Rule of Parity

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Additional Rules & Issues

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

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EMPLOYEE RETURING FROM UNPAID LEAVE

• First Option: 13 Weeks Rule
• Where “no hours of service” period is greater than 13 consecutive weeks:

– Employer may treat the employee as terminated and rehired as a new employee – Track employee hours in a new Initial Measurement Period

• Where “no hours of service” period is less than 13 consecutive weeks:

– Employee must be treated as an ongoing employee – Put employee in Standard Measurement Period and count prior hours

• Examples:

– Employee takes unpaid leave for 15 weeks, then returns

» This is employee would be considered a newly hired employee upon return

– Employee is rehired 12 weeks after quitting

» This employee would be considered an ongoing employee upon return

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Additional Rules & Issues

GBS Benefits, Inc. 72 Measurement Methods Under ESR

EMPLOYEE RETURING FROM UNPAID LEAVE

• Second Option: Rule of Parity (the at least 4 but less than 13 weeks rule)
• Where “no hours of service” period is less than 4 consecutive weeks:

– Employee must be treated as ongoing employee

• Where “no hours of service” period is greater than 13 consecutive weeks:

– Employer may treat the employee as terminated and rehired as a new employee – Put employee in a new Initial Measurement Period

• Where “no hours of service” period is less than 13 consecutive weeks but is at

least 4 weeks:

– The employer may treat the employee as a new employee upon rehire or return to service: If the period with no credited hours is longer than the employee’s prior period of employment – Examples:

» Ongoing employee: employee works 8 weeks, no service hours for 5 weeks, » Newly hired employee: employee works 5 weeks, no service hours for 8 weeks » Ongoing employee: employee has no service hours for 3 weeks » Newly hired employee: employee has no service hours for 14 weeks

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Additional Rules & Issues

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

GBS Benefits, Inc. 73 Measurement Methods Under ESR

APPLICATION OF UNPAID LEAVE RULE

• For employees are identified as an ongoing employee upon return, the

Measurement and Stability period that would have applied (had the employee not taken a break) continue to apply upon the employee’s return to work

• Example: if employee returns to work during a stability period in which the

employee should be treated as a full‐time employee (after calculating the average monthly hours worked during the associated Measurement Period):

• The employee must be treated as a full‐time employee through the end of the

stability period and must be immediately put on coverage

• “Immediately” means:

– as soon as the employee works one hour of service, – or as soon as administratively feasible after that (first of the month appears to be ok) – there is no 90 day waiting period under these circumstances

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Additional Rules & Issues

GBS Benefits, Inc. 74 Measurement Methods Under ESR

SPECIAL UNPAID LEAVE: FMLA, USERAA LEAVE AND JURY DUTY

• The 13 Weeks Rule and the Rule of Parity do NOT apply to “Special Unpaid Leave”
• Treat these employees automatically as ongoing employees, not newly hired
• The employee will be considered an ongoing employee
• The Measurement and Stability period that would have applied (had the

employee not left) continue to apply upon the employee’s return to work

• In addition, these employees are also credited hours of service as if they had

worked during the period they were gone

– To calculate the amount of service hours to credit, average the employee’s hours during months actually worked and apply the same amount of hours of service to the unpaid leave period

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Additional Rules & Issues

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

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WHEN EMPLOYEES HAVE A CHANGE IN JOB STATUS

• Issue: Dealing with changes from full‐time to part‐time and part‐time to full‐time
• Generally, changes or fluctuations in hours are taken care of by the Look Back

Measurement Method by averaging hours over the Measurement Period

– Exception, the regulations do provide special rules for changes in status. However, it is unclear from the Final Regulations whether “Change in Status” means or requires more than a simple change in hours and whether to use the exception, an employee must have actually changed his/her actual job position, title and duties. – Until further clarification, the conservative and safest approach is to apply the exception to ONLY situations where there is an actual job position, title and duty

• change. Where only hours have changed, simply follow the Look Back

Measurement Method rules.

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Additional Rules & Issues

GBS Benefits, Inc. 76 Measurement Methods Under ESR

WHEN EMPLOYEES HAVE A CHANGE IN JOB TITLE, POSITION, OR STATUS

• For Employees in Initial Look‐Back
• Change from Variable Hour/Seasonal/Part Time to Full‐time:

– The Employer must offer coverage by the earlier of:

» The first day of the associated Stability Period, if the employee averaged at least 130 hours per month during the full Initial Measurement Period, OR » The first day of the 4th month after the change in status, or if sooner, the end of the employer’s 90 Day Waiting Period, typically 1st day of the 3rd month

• Change from Full‐time to Variable Hour/Seasonal/Part Time

– There should be no situation like this because only newly hired employees who at the time of hire at NOT expected to work full‐time are put in the Initial Look Back Measurement Method

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Additional Rules & Issues

Steps to Compliance: Understanding Measurement Methods under ESR GBS Benefits, Inc

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WHEN EMPLOYEES HAVE A CHANGE IN JOB TITLE, POSITION, OR STATUS

• For Employees in Standard Look Back
• Change from Variable Hour/Seasonal/Part‐Time to Full‐Time:

– Employer isn’t required to offer coverage until the next administrative period following the associated Measurement Period (for coverage in the associated Stability Period), and then only if the employee was full‐time over the course of the Measurement Period

• Change from Full‐Time to Variable Hour/Seasonal/Part‐Time:

– The employer can take the employee off coverage as of the 1st day of the 4th month after the employee changes positions and can switch to the Monthly Measurement Method, but only if two requirements are met:

» Employee had continuously been offered coverage starting from employer’s eligibility period at initial hire date to the date of the change in employment status, and » The employee averaged fewer than 30 hours per week (or 130 hours per month) for each of the first 3 months immediately following the change in status/position

USING THE LOOK-BACK MM

Step 4: Determine Which Employees will be Offered Coverage & When

Additional Rules & Issues

NEXT STEPS

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Employer Shared Responsibility

Determine Employer Size

STEP 1

Determine Compliance Date

STEP 2

Determine What will be Offered

STEP 3

Determine Which Employees will be Offered Coverage and When

STEP 4

NEXT STEPS

Large Employer Information Reporting GBS Benefits, Inc. 80

• Complete all 4 Steps and document each step result
• Spend time on Step 4 learning the Measurement Methods, it takes time to

process

• Create written Measurement Method policy

– GBS has a template you may use to complete this

• Determine tracking technology and begin tracking

– If using a vendor for tracking, either for Employer Shared Responsibility or for Information Reporting, give the vendor information and options you chose in your Step 4 Measurement Method policy. Don’t let them change it

• Make sure to determine eligibility according to the written measurement
• policy. If questions arise about how to deal with an eligibility situation, the

written measurement method policy contains the answers.

• Update your Summary Plan Description (SPD), your employee handbook and

any other employee communication to reflect your new Measurement Method policy

NEXT STEPS

Employer Shared Responsibility

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GBS Benefits, Inc. 81 Steps to Compliance: ESR & Information Reporting

Steps to Compliance:

Information Reporting

INFORMATION REPORTING

Determine Employer Size

STEP 1

Determine Compliance Date

STEP 2

Determine What will be Offered

STEP 3

Determine Which Employees will be Offered Coverage and When

STEP 4

Reporting

STEP 5

EMPLOYER SHARED RESPONSIBILITY INFORMATION REPORTING

QUESTIONS?

This presentation is intended for general informational purposes only and does not constitute legal advice. Please consult with your legal counsel and tax professional to determine how laws discussed herein apply to your specific circumstances and to your obligations.

The Measurement Methods Under Employer Shared Responsibility

Susan L. Grassli, J.D. April 2016

ACA COMPLIANCE