PO POLI LITI TICA CAL L LAN LANDS DSCA CAPE PE Washingtons - - PowerPoint PPT Presentation

PO POLI LITI TICA CAL L LAN LANDS DSCA CAPE PE

Washington’s political dynamic is fractured House actions are tempered by conservative pressure and tight Democratic majority in the Senate and President Obama Demonstrating business impact extraordinarily important States are dealing with a host of health reform issues Exchanges Medicaid Expansion Budget Concerns Lack of Information from the Federal Government Extreme variances in attitudes about implementation including amongst branches of state government

FIN INAL L EM EMPLOYER YER MANDATE TE RU RULES LES

• On Februar

ary y 10, 2014, , the federal Department ment of Treasur ury y released the final nal rules on compliance iance with th the employer r shared re responsib nsibility ility re requireme irements nts under r the health h re reform rm law, which ch

• ften referred to as the law’s employer mandate provisions.

https ps:// ://s3.a 3.ama mazona

• naws.co

s.com/p m/pub ublic ic- inspe pectio ction.f n.federal ralreg regist ister.g .gov/2 v/2014-03082 3082.p .pdf df

• The ru

rules will genera rall lly y take effect on Ja Januar uary y 1, 1, 2015. .

• The Departme

tment nt of Treasur ury y also has a web web page avail ilab able le

• ffering

ing more guidance ance on the rules and det etermining mining employer r eligib ibility ility. . http:// tp://www ww.i .irs.g s.gov/uac/ /uac/Ne Newsr sroo

• om/

m/Que Questio stions ns-and and- Answers-on

• n-Empl

ployer-Sha Shared red-Resp sponsib nsibilit ility-Pr Provisio visions ns-Und Under-the he- Affordab able-Ca Care-Act ct

The final rules provide a number of important changes from the proposed rules issued in December

• 2012. They also provide a great deal
• f transition relief for employers of all

sizes who are subject to the mandate.

MAJOR OR CHANGES NGES WE WILL LL DISCUSS SCUSS TODAY

 Enfor

• rce

ceme ment t delay y for mo most st groups ps with th 50-99 99 full-ti time me equival alen ents ts  Obliga gati tion

• n clarity

ty for emplo loyers s with h empl mployee ees s in a multiem iempl ployer plan  Guidance ance on how w to treat at emplo loyees es of staffing g firms, ms, PEOs, , school hool fa faculty ulty, student dent workers, s, people ple with h on-ca call ll and layover er hours, , volunt untee eers, , clergy rgy and ot

• ther

her emplo loyee ees s with h trick cky y hour urly ly calculati tions.

• ns.

 Transit ition ion relief ef for: Establishing lishing a compl pliant iant plan by 2015 Non

• n-ca

calen lenda dar r year r plans Cover ering ing 95% % of your r workforce ce Cover erage age of Depende endents ts  Changes to the “rehire” calculation lation  Change ges s to mon

• nthl

thly y meas asurem rement ent period iod options ions

EMPLOYER MANDATE BASIC COVERAGE RULES FOR LARGE EMPLOYERS

Large rge employer ers may y be subje ject ct to an excis ise tax x if if at le least t one full ll- tim ime empl ployee whose

• se

hous useho ehold ld in incom

• me is

is bet etwee ween n 10 100-400% 400% of FPL le leve vel l receives es a premium um tax x credit it fo for Excha hang nge e cove vera rage e and the emplo loyer r eit ither er:

“A” Penalty Fails to offer minimum essential coverage to full-time employees and their dependents “B” Penalty Offers coverage to full-time employees that does not meet the law’s affordability

• r minimum value

standards

RU RULE LE ON N MINI NIMUM MUM ESSENTIAL ENTIAL COVERA ERAGE GE

Minimum Essential Coverage Includes:

• Insurance policies sold in the

small or large group market

• Employer-sponsored group health

plans (a group health plan is a welfare arrangement under ERISA that provides medical care to employees or dependents through insurance, reimbursement or

• therwise)

Minimum Essential Coverage Does Not Include:

• Stand-alone HRAs that are not

integrated with a group health plan

• HIPAA-excepted benefits such as:

stand-alone vision or dental, cancer-only policies, indemnity plans (hospital or disease), accident or disability plans, on-site medical clinics and other types of coverage listed in PHSA §2791(c)

COVERAGE TESTS

AFFORDABLE MINIMUM VALUE

Employee’s share of the premium cannot exceed d 9.5% of househo ehold ld income.

• me.

Afforda dability ty test is based d on the cheapest est minimum um va value ue plan the emp mployer r offers. s. HRA contri ributi utions

• ns under

r certain ain circum cumstan stances ces are fa factore

• red

d into

• the

afforda dability y calcula ulati tion. n. Test is also based d on the emp mployee ee-only

• nly rate,

regardl dless ess of whet ethe her r or not

• t the employee

ee selects cts fa family y or dependent dent coverag rage Afforda dability ty test is based d on fa family income me but the final rule e codifies s wag wage-based sed safe harbor

• rs

s for emp mployer ers. s. Lowest t tier r plan must be at at least st a 6 60% actuari rial l va value ue Ac Actuarial arial va value ue is based on cost-sh sharin ring g and

• ut
• ut-of
• f pocket

t expenses, ses, not

• t premium

ums Emp mployer r contri ributi tions ns to account nt-based sed plans s will fa factor r into

• actuarial

arial va value ue Ad Admini nistr strati tion

• n has a c

calcula culator

• r and there

e are ot

• ther

r safe e harbor

• rs

s emp mployer r can use Small groups ps that offer r Bronze e or higher her meet et the minimum mum va value e standar dard d but there re is no safe harbor r for grandf dfathere thered d plans, s, self funded plans or “grandmothered” plans

How Do The “A” and “B” Penalties Work?

The e A Penalt alty Failing ling to offer er minimu imum m essen entia ial l coverage e to enough h full-time time emp mplo loyee ees s and d their ir depen ende dent t childr ldren en The e B Penalty lty Not

• t offer

ering cover erag age e to an emplo loyee e or a child ild depen ende dent t that meets ts either her the minimu imum m va value lue test, t, the affor

• rda

dabi bility lity test or bot

• th

The e penalt alty for the fa failu lure to offer er coverage e is $2,000 ,000 x full-time time emplo loyees es not

• t covere

red, d, minus s the first st 30 emp mplo loyee ees, s, i.e.

• e. your first

st 30 full time e empl mployees ees are e exem empt t from

• m the

calc lculati lation.

• n.

The penalty for the failure to offer “affordable” and/or “minimum value” coverage is the lesse ser of two

• penalty

alty calc lcula latio ions: s: $3,000 per applic icable ble emplo loyee e or $2,00 000 0 times es ever ery full-time ime empl mployee, ee, minus s the first st 30 empl mployee ees. At least ast one e emp mplo loyee ee must receiv ive e subsidiz sidized d coverage e in the exchan hange e to trigger er penalties alties and you can’t be hit with both

• th the A and B penalt

altie ies, s, it is one e or the

• t
• ther

er.

Applica icable e emplo mployer ers s can be penalized ized eithe her for :

ENFORCEMENT IS DELAYED FOR 50+ GROUPS

• The fina

nal rules s phase se in the emp mployer r require quireme ment nts s for smaller er emp mployer ers, givi ving ng emp mployer ers s with th less s than n 100 full-ti time me equ quivalent nt emp mployees es (FTEs Es) but more than n 50 FTEs Es unti til Januar ary 1, 1, 2016, , to comp mply.

• To be e

eligib gible, , an emp mployer er will have to go t through ugh a certi tific fication ation process cess to demonstr nstrate e that t duri ring ng the period d beginni nning ng on Februa uary y 9, 2014, 4, and ending ng

• n December

r 31, 1, 2014, 4, the emp mployer er does not

• t reduce

ce the size of its ts work rkforce ce

• r the overall hours of servi

vice of its ts emp mployees es in order r to sati tisf sfy y the work rkforce ce size ze condi diti tion. n.

• Emp

mployer ers s will have to count nt full-ti time me equ quivalent nt emp mployee ees s using the already dy establishe hed d met ethod d of counti ting ng part-ti time emp mployees es in their eir emp mployee tot

• tal on a

pro-rata rata basis, even thoug ugh h part-ti time me emp mployees es do not

• t have be o
• ffere

red d coverage ge if f they y work rk an average of less s than n 30 hours a w week.

• Emp

mplo loyer ers s may establish lish a s six-mon

• nth

th period

• d in 2014

4 to count t emp mployees es to det etermi rmine ne if the mandat ate applies s for the subsequent sequent year. .

• If the emp

mployer er uses es the last t few months hs of the year as its ts measure urement ent period

• d

for applicability ty, the emp mployer er will not

• t have to have a c

comp mplian ant t plan in place for all emp mployees ees by January y 1.

• 1. The emp

mployer er will l not

• t be s

subject ct to penalti ties es for the first st thre ree e months ths of the year if such ch an emp mployer er establishes hes a comp mpliant nt plan and offer ers s it to all eligib gible emp mployees es by A April 1. 1.

SMALL COMPANIES THAT ARE OWNED BY LARGER COMPANIES

• Emp

mployees es of entiti ties es that t are part of a contr trol

• lled

ed group are still all aggregat egated ed when an empl mployer er is det etermin minin ing g whethe ether or not

• t mandat

ate e enfor

• rceme

cement t would d apply y in 2015. However er, , applica icable e penalti ties es will still be applie ied d on an entity ty basis sis.

• The tax

x penalti ties es will be applie ied d separat atel ely to each h memb mber er of the contr trol

• lled

ed group and each h is separa aratel ely liable, e, but t for penalty alty purposes

• ses

the whole group can only subtract tract 30 emp mployees ees one time e and must st split t the reducti ction n base sed d on the number er of empl mployees ees emp mployed ed by each h memb mber er compa pany y being ng penalized. ized.

• EXAMP

MPLE: LE: A A compa pany y with th 800 full-time time emplo loyees ees would ld be oblig ligat ated ed to

• ffer

er coverage rage or face e penalti lties es in 2015, as would ld its wholl lly y owned ed subsid idiar ary with th 60 emplo loyees

• ees. However

er, if the e 60 person

• n subsid

idiar ary gro roup up did d not

• t offer

er affor

• rdable

able and d minimum um va value e coverage rage and the e 800 employee ee parent ent compa pany y did, d, applicab cable le penalti lties es would ld be applied ied to the e subsidia idiary y separat ratel ely y accor

• rdin

ding g to a formul mula outlin ined ed in the final l rule e and the e paren ent t compa pany y would ld not

• t be penaliz

ized ed for the e acti tions

• ns of the

e subsid idiar ary.

CONTROLLED GROUP RULES

Det eter ermining ining control

• lle

led d gro roup up status tus is is ve very y complicat plicated ed and a bro roker er canno not t le legally ly do this is for for an employer er. . A summar ary y of the rule le for for refe fere rence nce is is it it is is two

• or more

re corpo rporati ration

• ns

s general rally ly connect nected ed thro rough ugh commo mmon contr trol/s

• l/stock
• ck ow
• wner

nership ship in in any of the fol follo lowing ng ways: s:

• Parent-subsidiary group
• Brother-sister group
• Combined group

Normal shared ed ow

• wner

nershi ship perc rcentage entage is is 80% but it it can vary! For refe fere rence, nce, the IR IRS attem empts pts to expla lain n it it all ll in in this is 10 108-page age publi licat cation ion! http://ww ://www.ir .irs.go gov/ v/pub/i pub/irs-teg ege/ e/ep epchd7 hd704 04.p .pdf df

Important Points to Know

• The group’s CPA /tax counsel

should already know what they are and this is not something a broker can legally determine for a company.

• The controlled group rules

apply for 401Ks too. .

In companies with common ownership, the IRS controlled group rules apply and all employees of controlled group are counted to determine mandate applicability.

NON-CALENDAR YEAR PLANS

• Emplo

ployers s who offer er no non-calendar lendar year r plans ans and nd who have e met et certa tain in requ quirement ements s are not not require quired d to comply ply with th sectio ction 4980H 0H unt ntil il the e start of their eir ERISA A plan years s in n 2015, 15, rathe her than n on J n Janu nuary y 1, 2015 15.

• The

he rule les s for elig ligible ble plans s ve very y simil milar r to the cond ndition itions s for trans nsiti ition n relie lief f in n the e propose roposed d rule le and nd begin gin on p n page ge 107 in n the e fi final nal rule le. MAJOR R CON ONDIT DITION IONS

• Maintained non-calendar year plan before December 27, 2012
• Did not modify plan year after December 27, 2012
• Did not change eligibility rules after February 9, 2014

IMPOR ORTANT ANT NOTE: TE: This s provision sion applie ies s to the ERISA A plan year stipulat pulated ed in the group’s plan documents, not their plan cont

• ntract

act renewal date e ,and d these se dates s may differ er.! If a group doesn’t have legal ERISA plan documents, the contract renewal date is the default fault date, but t you need to create e plan documen ments ts for DOL enfor

• rcemen

cement! t! If f a group has appropri priat ate e plan docume ument nts, they may want to modify fy their ir ERISA A plan year to confor

• rm

m with the plan renewal date e for ease e of admini nistr strat ation ion, but t they can only do that t if the ERISA A renewal al date is later in the year than the plan contract tract renewal

• al. If

f the ERISA A date e comes es first, t, the plan needs ds to have e all changes nges in effect ect on the date of the ERIS ISA plan annivers ersary!

Getting Compliant

Problem: Currently offer to all FT employees but plan isn’t currently affordable or meets MBV By Plan Year Renewal in 2015: Must offer affordable, MV benefits to its FT employees Benefit of Transition Relief: No penalty for months prior to renewal if compliant by beginning

• f 2015 Plan Year

All Full-Time Employees Substantial Percentage

Problem: Currently offers to some but not all FT employees currently and cannot meet the all employees test By Plan Year Renewal in 2015: Must offer affordable, MV benefits to at least 70% of its FT employees and 95% of FT employees by 2016 renewal Benefit of Transition Relief: No penalty for months prior to renewal if offer to all FT employees by beginning of 2015 Plan Year

All Employees Substantial Percentage

Problem: Currently offers to some but not all FT employees By Plan Year Renewal in 2015: Must offer affordable, MV benefits to at least 70% of its FT employees and 95% of FT employees by 2016 renewal Benefit of Transition Relief: No penalty for months prior to renewal if offer to all FT employees by beginning of 2015 Plan Year REQUIREMENTS FOR NON-CALENDAR YEAR TRANSITION RELIEF

• 1. Maintained non-calendar year plan before December 27, 2012
• 2. Did not modify plan year after December 27, 2012

Special Requirement: Did not change plan eligibility rules after February 9, 2014 Special Requirement: As of end of last open enrollment before 2/9/2014 Special Requirement: As of end of last open enrollment before 2/9/2014

Offer to at least 33% of all employees Cover at least 25% of all employees

OR

Offer to at least 50% of all FT employees

Cover at least 33% of all FT employees

OR

WHAT IF THE GROUP DOESN’T OFFER DEPENDE DENT NT COVE VERA RAGE GE NOW? W?

• Applicable employers will not face

tax penalties relating to the

• ffering of dependent coverage

provided that employers take steps during plan years that begin in 2015 toward satisfying the dependent coverage requirements by their plan year renewal in 2016.

De Depe pendent ndent Covera erage ge

MULTI TI EM EMPLOYER YER PLA LANS NS

For union/ n/multi multi-employer plans, an employer won’t be penalized if:

• The

e emplo loyer r is requi uired red to make e a c contribu ntributi tion

• n to a mul

ultiem iempl ployer plan with h respect pect to a ful ull-ti time me emplo loyee e pur ursua uant nt to a collect lective e bargaining ining agreem eemen ent t

• r appropria

priate related d partici icipation pation agreeme eement nt

• Cover

erage age un under der the e mul ulti tiem emplo loyer er plan is offered ered to the e ful ull-ti time me emplo loyee (and the employee’s dependents)

• The

e coverage erage offered ered to the ful ull-time employee meets the law’s affordability and minimu imum m value ue standar ndards ds.

• The

e final l rul ule makes es it clear r that t this s policy cy will carry y forth th un until suc uch a t time me when hen the e IRS issues ues differen erent t gui uidance ance on the e topic.

• c. The

he final l rul ule says s that t sh should

• uld the

e cur urrent ent requi uirem remen ents ts ever er change, nge, the e change nge will be applied ed prosp spect ectiv ively ely, , so that t emplo loyer ers s will always s have the e chanc nce to come me into

• compliance

pliance before re being ing pena nalize ized. d.

WHO HO HA HAS TO BE OFF FFERED ED COVERA ERAGE? GE?

• Full

ll Tim ime Emp mplo loyees ees (30 hou

• urs

s or more e a we week)

• Dependent

dents s who are defi fine ned d as employee’s children under age 26 (IRC §152 52(f) f)(1) (1) Fina nal rule le exclud ludes es step- chil ildren en.

• Emplo

loyer ers s wil ill l not

• t face tax penaltie

ties s for ele lecting ng not

• t to offer

r coverage verage to spouses. uses.

• If a spouse

use has no ot

• the

her r sour urce ce of afford rdable ble emplo loyer-spo sponsored sored coverage verage, he/sh she e could ld get et an exchan hange e subsi sidy dy.

El Eligible ible emplo ployer ers s wi will ll only ly ha have e to

• ffer

er co coverage erage to 70 perc rcent nt

• f FT work

rkers ers in 2015 5 to avoid d th the “A” Penalty.

Key Points ts Abo About The Coverage Offer r Require quireme ment nt

• A large employer will be considered as
• ffering coverage to full-time employees and

can avoid the “A” penalty if they offer minimum essential coverage to 70% of the FT employees and dependents in 2015.

• All eligible employers will need to offer

coverage to 95% of eligible employees and their dependents in 2016 to avoid potential tax penalties under section 4980H(a)

• The choice to exclude certain classes of

workers (such as variable hour employees) in order to fall under the 70 percent coverage standard may be deliberate for 2015, as this transition relief was intended to make the transition to the 30 hour/week standard of offering coverage easier for employers.

• If any of the 30% of full-time employees and

dependents (and in later years the 5%) who are not offered coverage receive premium tax credits from an Exchange, the employer will be required to pay the “B” penalty--an annual penalty of $3,000 for each of those employees that gets subsidized coverage.

PARTIC ICIP IPATION TION REQ EQUIREME UIREMENT NTS

• HHS rules have prohib

ibit ited ed participatio ticipation n and contributio ribution n requireme irement nts for large group p fully insur ured d mark rket et issuer uers. s.

• HHS has

s re requir ired d small group p carr rrie iers rs to have a requireme irement nt-fr free e open enrollme ment nt perio iod d from Nov 15-Dec 15 annua ually ly.

• Pa

Participatio ticipation n requireme irement nts cannot t be a appl plie ied d on renewal. wal.

• The HHS partic

ticipation ipation re requir irem ements nts are re under er the guarant antee e issue and renewab wabil ility ity provisions isions of the law and so they do not

• t appear

ar to apply ly to any participa icipatio tion n and contribut ibutio ion n requireme irement nts that t may be a applie lied d by stop-loss ss issuer uers. s.

DE DETERMINING RMINING FU FULL LL-TIME TIME EMPL PLOYEE EE ST STATUS US

Generally ly, an employee who was employed d on average at least t 30 hours s of servi vice ce per week or 13 130 hours of servi vice per month th is consi side dered red full-ti time me. . When calculati ting ng hours s of servi vice ce, , the following wing genera ral rules es apply: :

• The common law definition of employee is used.
• All hours of service an employee performs for members of the controlled group are counted.
• Each hour for which an employee is paid, or entitled to payment, for performance of duties for

the employer is counted including vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence

• Special rules for variable hour employees

SPECIA ECIAL L CAS CASES ES

The rules provid ide that t the servic ice e hours of certain ain types s of individ ividual uals s are not

• t taken

n into consid ideratio ration, n, even if these individ dividual uals s re receive e some form rm of compens nsation ation (such h as expense se reimbur burse seme ments nts). ). You don’t have to count:  Hours s wo work rked by individ ividuals uals who meet et a definitio inition n of a bona fide volunteer if they aren’t receiving wages for that time.  Students nts who are participa ticipating ting in the federal al wo work rk study y program am or a simil ilar ar state-bas ased ed program am  Individ dividual uals s who work work for r re religio ious us org rganiz izati ations ns who have taken n a vow of poverty ty. . Regular ar studen ent wo work rkers s and paid d interns do have to be counted, ed, but you can appl ply y va variabl able hour rules and a standar ard d measure ureme ment period

• d to these emp

mplo loyees. s.

HARD D TO TRACK CK HOURS URS

Airline Workers (Layover Hours)

The IRS says it’s still figuring out how to treat these airline employees under the law but that in the meantime, their companies should just be “reasonable” about how to count these layover hours. If a flight attendant is paid during time spent in a layover, the rule notes it’s only reasonable to count those hours toward full-time status.

Cruise Ship Workers

Workers can’t be considered as working outside the US, but any work paid for by “sources outside the United States” won’t count toward the cruise ship’s health care calculation.

Adjunct Faculty

Every hour an adjunct faculty member teaches in a classroom counts as two-and-a-quarter hours of actual work. Required office hours or faculty meetings, however, are based on actual time.

On Call Workers

Until further guidance is issued, employers of employees who have on- call hours are required to use a reasonable method for crediting hours

• f service

STAFF AFFING ING FIR IRMS MS AND PEO EOS

Offering ring Coverage erage

 The determination has to be made if the employee is the “common law” emp mployee ee of the hiri ring g company or t r the PEO or s r staffing ing firm rm. . The e IRS states es that in typical cal cases es the PEO or staffin ing g firm is not

• t the common

mon law emp mployer er.  A staf affin ing g firm or PEO may make the offer er of coverage age for the hiring g emp mployer er, but if the hiring g emp mployer er is an emp mployer er subje ject ct to the mandate, the employer’s obligation to offer coverage will only be satisfied if: “the fee the client employer would pay to the staffing firm for an emp mployee ee enrolled ed in health th coverage erage under the plan is higher er than n the fee the client nt emp mployer er wo would pay to the staffi fing ng firm for the same e emp mployee ee if the emp mployee ee did not

• t enroll in health

th coverage age under the plan. n.

Trac acking king Hours

 When tracki king ng hours s due to extreme eme varia iability ility in practi tices ces within in this s industr stry, , temp mp firms are directed to calculate their employees’ hours based on “the typical experience of an employee … with the temporary staffing firm.”

REH EHIRES IRES

The fina nal l rul ule e ret etain ins the requirem rements ents for an emplo mployer r to us use when en classifying sifying an empl mployee ee with h a break eak in service ice as a “rehire” with regard to the coverage rules The fina nal l rul ule e reduces ces the lengt ngth h of the brea eak k in se service ice required uired before

• re a ret

eturning rning to be treated ed as a new w emplo mployee ee from

• m 26 week

eks to 13 13 weeks.

• eks. This break

eak-in in-ser service vice period iod applies ies for both

• th the look
• k-back

ack measureme rement nt met ethod hod and the monthly nthly measuremen asurement t met ethod. hod. So that educ ucat ational ional emplo mployee ees are not

• t treated

ed as rehires ires after er sum ummer mer break eak, , the 26 week ek windo dow w is applied ied for them m only ly.

FULL-TIM IME E STATUS DETERM RMINATIO ION

If YES, then If YES, then If unknown, cannot be reasonably determined then… If No, then

NEW employee is hired Offer coverage to employee within 90 days of hire Start the Initial Measurement Period (IMP) to determine if the employee averages 30

• r more hours

per week Did the employee average 30 hours in the IMP? Offer coverage for stability period

• r potentially

pay a penalty No offer of coverage is required Is employee expected to be full-time?

(30 hours of service per week/130 hours service per month)

OTHE HER R ODDS AND ND END NDS IN T N THE HE 227 7 PAGES GES OF F F FUN

In additio tion n to all of the rule e changes, ges, the final l rule e maint ntai ains ns a n number ber of provis visions ions included uded in the proposed

• sed rules

es, , including uding : The optional look-back measurement method of determining full-time employee status Employer affordability safe harbors based on employee W2 wages, rates of pay or the federal poverty guidelines.

FINAL AL RUL RULES ES ON EM EMPLOYER ER REP EPORTIN RTING

• Secti

ction

• n 6055

55 requi uires res self-insured insured health alth plans, s, insuran urance ce issuer uers, s, and governm ernmental ental un units s to repor port t to the e IRS and provide vide a s statem emen ent to indi dividuals viduals regarding ding minimu imum m essen sential tial covera erage ge ONLY for r those

• se

actua ually lly enrol

• lled

led. .

• Purpose is to determine compliance with the individual mandate.
• Secti

ction

• n 6056

56 requi uires res emplo mployers s with h 50 or more re ful ull time me equi uivalen lent t emplo loyees es to repor

• rt to the

e IRS S and provide ide a stateme ement nt to all ful ull time me emplo loyees es relativ tive e to the e offer er of cover erag age, e, wheth ther r it was s accep epted d

• r not.
• t.
• This

s secti tion

• n also requi

uires res emplo loyer ers s to track k which ch ful ull time me emplo loyees es were re covered ered or offered ered covera erage ge by mon

• nth

th, but ut the e repor port t is s only y filed ed annually ually. .

• There

ere are severa eral l alternativ rnatives es available, ble, but ut they y will not

• t be

approp

• pri

riat ate e for r all emplo mployee ees s and emplo mployers s who

• us

use them em may still have e to us use the e genera neral l meth ethod d for some me emplo loyees. s.

OTHER ER EMPLOYE YER R RESPON PONSIBILITIES: SIBILITIES: IT’S NOT JUST THE MANDATE

• Emp

mplo loyer ers s are also

• respon

ponsi sible ble for maintaini ntaining a P PPACA-com

• mpl

pliant ant plan, n, which ch inclu lude des s adher erenc ence e to mark rket reform rm requi quire rements ments, , not

• tice

ce requi quire rements, ments, et etc.

• While

le healt alth insuranc surance e carrier ers s assum ume e some e respon ponsi sibil bility y for fully ly insur sured ed plans, ans, there re are comp mplia lianc nce e burdens ens for all size e emp mplo loyer ers s too

• The

e Depar artment ment of Labor r has enforcemen ement authorit

• rity.

. Primar mary y enforcem ement ent means ns is audits, s, and signi nificant cant resour

• urces

es and funds ds have e been dedicat cated ed for audits s in 2014 and on forwar ard. d.

• Top audit

it trigger er--

• -em

empl ployee ee compl mplaints aints! ! Other ers s includ clude IRS memor

• rand

andum um of under erstanding, standing, third party y vendor

• rs

s and form 5500 fili ling ngs. s.

• Fines

es can be heavy! vy! Up Up to $100 per day per violat lation

• n for each imp

mpac acted d benef eficiar ary.

EM EMPLOYER YER COVE VERA RAGE GE MA MARKET KET REQUIREM QUIREMENT ENTS

Emp mployer er Coverag age Requireme rement nts

• Policies sold in the small or large group market and employer-sponsored group

health plans must comply with market reforms under the ACA and certain

• ther HIPAA/ERISA/COBRA benefit rules (including but not limited to):
• dependent child coverage to age 26,
• prohibition on preexisting condition exclusions, preventive services with no

cost sharing,

• prohibition on annual/lifetime dollar limits on any EHBs offered,
• waiting period limitations,
• cost-sharing limits
• group health plan reporting and disclosure
• clinical trials coverage
• mental health parity, etc.
• Policies sold in the small or large group insurance market must also comply

with state insurance market reforms and state benefit mandates

90 90-DAY Y WAITI ITING NG PERIOD IOD REQUI QUIREMENT REMENT

A group p health th plan or health th insurance nce issue uer offering ng group p health th insurance nce coverage age may not

• t apply any waiting

ng period d that exceeds eeds 90 days. The rules s apply to group p health th plans s of all sizes, es, grandf dfathered athered plans, s, fully insured ed and self-fu funded nded plans. s. Plans s may not

• t requir

quire e that emp mployees es will become

• me eligible

ible for insuranc ance e cover erage age on the first t of the month h after 90 days.

• s. This

s plan desi sign gn is not

• t

accep epta table as it would d typical ally y exceed eed the 90-da day limit. Non-com complian ance ce will result in a penalty ty for every y month h the emp mployer er does s not

• t offer

er coverage erage if any emp mployee ee obtains ains coverage erage through ugh an exchan hange ge and is eligibl ible e for a premium um tax subsidy sidy.

OTHER HER EM EMPLOYER YER REQ EQUIREMENT UIREMENTS

• Currently delayed enforcement but rules

governing all fully insured plans expected before 2015 IRS Nondiscrimination Rules

• Large employers must report health plan

value on 2012 W2s on forward

• Requirement currently optional for employers

that issue less than 250 W2s

• For “informational” purposes, not the taxation
• f benefits

W2 Reporting

• Employers with more than 200 employees will

have to begin auto-enrolling new employees in benefit plans

• Still need regulations on how opting out will

work, coverage waivers, waiting periods, etc.

• Effective date is unclear—not until 2015 at

least Auto Enrollment

40 0 HOUR UR WORK RK WEE EEK

• S. 1188,

188, the Forty ty Hours is is F Full Tim ime Ac Act, t, Susan Collin ins, s, R-ME, , bip ipartis isan

• H.R.

. 2575, 75, the Save Ameri rica can Work rkers Ac Act t of 2013, 3, Todd dd Young, , R-IN, N, bip ipartis isan (mostly tly Repu publica licans)

• H.R.

. 298 988, 8, the Forty ty Hours s is is Full Tim ime Ac Act, t, Danie iel Lip ipin inski, i, D-IL, bip ipartis isan (id identic ical to S1188) 88)

RATING ING BANDS DS AND SMAL ALL L GROU GROUP DED EDUCTIBLE UCTIBLE CA CAP

• H.R.

. 544, Phil il Gingre grey, , R-GA, , the bipar arti tisa san n Lett etting ing Insuran urance ce Benefit it Everyon

• ne

e Regar ardles dless s of Their ir Youth h (LIBERT IBERTY) Y) Act, which h allows ws stat ates es to incre reas ase e the law’s age rating bands from the current 3 to 1 spread to bands ds that t more re closely ely resem emble le the natural ural breakd akdown n of age and meet t the needs s of a p parti ticu cular lar stat ate. . If a state does not set its own bands, the default would be 5 to 1

• H.R.

. 2995, Tom Reed ed, , R-NY, , is a bipar artisan tisan bill ll to eliminate the new law’s $2,000/$4,000 deductible cap for small all busin ines esses ses.

HEA EALTH TH IN INSU SURAN RANCE CE TAX

• H.R.

. 763, Charles rles Bousta stany, , R-LA, , and S. 24, Rob Portman tman, , R-OH OH, , bipar artisan tisan legis islation lation to elim imin inat ate e the new nation ional al premium emium tax x

• H.R.

. 3367, Charles arles Boust stan any, , R-LA A creat ates es a two wo year delay y of the nationa ional l premi mium um tax. x. The legislation would return to tax payers the HIT tax in the first year and lower premium cost in the second year.

SMAL ALL BUSINES INESS S TAX CREDIT DIT

• S2069,

, Sen. . Mark rk Begich ich, , D-AK K and HR412 128, , Rep. . Susan an DelBen Bene, e, D-WA, , have intr trod

• duc

uced ed a bill ll to imp mprove e the Small all Business iness Tax x Credi dit. t.

• The bill

l makes es a n number ber of impr mprovem ement nts s includin uding g allowing ing coverage rage outsi side de of the Excha hange nge in certa tain in circumstanc umstances, es, increas easing ing thresh reshold

• lds

s for busin iness ess size ze and income, me, and changing ging the formu mula la to allow w business inesses es to qualif lify y for longer ger perio riods ds of time. me.

,

Q & A Q & A