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

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Presentation on theme: "Applicable Large Employers must offer an affordable healthcare insurance plan that provides minimum essential value to a percentage of their full-time."— Presentation transcript:

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2 Applicable Large Employers must offer an affordable healthcare insurance plan that provides minimum essential value to a percentage of their full-time employees or face a penalty. ◦ Review key concepts related to the Affordable Care Act (ACA) ◦ Review ACA features in Millennium (M3) and Payentry ◦ Review ACA features MPAY to provide in future enhancements 2

3 ◦ Review definitions on WebHelp at: ◦ Step 1 – Determine Applicable Large Employer (ALE) status  Use prior calendar year employee counts to determine ALE status for upcoming year  Only for 2015, employers may use consecutive 6 month period of their choosing from 2014  ALE is required to report to IRS starting at 2015 Year-end 3

4 ◦ Step 1 (Cont.)  ONLY For 2015, employers with 100+ full-time/full-time equivalent employees subject to play or pay  Must cover 70%+ of their full-time employees  Exemption for first 80 employees  Employers with full-time / full-time equivalent employees must file at year end to claim transitional relief  From 2016 on, employers with 50+ full-time /full-time equivalent employees subject to play or pay  Must cover 95% of their full-time employees  Exemption for first 30 employees 4

5 ◦ MPI_1403: ACA Large Employer Estimate  Hours must be recorded in system  Setup a code group so only earnings for service hours are counted  ARE NOT service hours: bonus, mileage, union health & welfare benefits  ARE service hours: FMLA, Jury Duty, PTO, On-Call  Estimates number of Full Time and Full Time Equivalent employees  Why an estimate? IRS requires employers to count employees by calendar month ◦ Proceed to step 2 if:  Employer KNOWS they are an ALE  Employer thinks they MIGHT be an ALE 5

6 ◦ Step 2 - Employers must classify employees  Do not count 1099 workers  Excluded: Volunteers, religious workers, students on work/study  Full-time: 30+ hours/week or 130+ hours/month  Part-time: Less than above  Separate Variable Hour employees and Non-Variable Hour employees ◦ What is “Seasonal” used for?  Applies to employees who work full-time hours on only 120 (or fewer) days in a calendar year because of employer’s seasonal business  Employer may take a seasonal worker exemption when determining ALE status 6

7 MonthFull-time Employees Part-time Hours Full-time Equivalent TotalsSeasonal Employees Less Seasonal Employees January February March April May June July August September October November December Average

8 MonthFull-time Employees Part-time Hours Full-time Equivalent TotalsSeasonal Employees Less seasonal Employees January February March April May June July August September October November December Average

9 ◦ M3: Standard New Hire screen requires ACA Status 9

10 ◦ M3: Employee ACA Status screen 10

11 ◦ Payentry: New Hire screen requires ACA Status 11

12 ◦ Payentry: Employee ACA Status screen 12

13 What about all the existing employees in the system? 13

14 ◦ M3: Employee ACA Status Bulk Update 14

15 ◦ Does the employer have seasonal workers?  Rerun MPI_1403: ACA Large Employer Estimate and include seasonal ◦ If the employer is an ALE, verify each employee’s status 15

16 What if I don’t know every employee’s status? 16

17 ◦ M3: Employee ACA Status Audit 17

18 ◦ Employee ACA Status Audit demo  Non-variable Hour employees  To verify employee is classified correctly for year-end reporting  Newly hired Variable Hour employees  To determine employee status and eligibility for benefits  Use an initial measurement period tied to hire date  IRS allows initial measurement period to start first month after hire date  Ongoing Variable Hour employees  To determine employee status and eligibility for benefits for upcoming plan year  Use an ongoing measurement period that is the same for all (similar to a traditional open enrollment) 18

19 ◦ Variable hour measurement periods explained 19

20 ◦ Step 3 – Determine plan affordability for full-time employees  Employers may use a “Safe Harbor” method by calculating the employee’s premium contribution for employee-only coverage in the lowest cost plan that provides minimum essential coverage at no more than 9.5% of the employee’s income.  Only applies to employees who are not eligible for a Federal program such as Medicare, Medicaid, CHIP, etc…  Employer penalties for not offering healthcare insurance are dependent on one or more employee receiving a subsidy when the employee purchases insurance through Healthcare.gov or state marketplace.  Some employers offer multiple healthcare plans  Only the lowest cost plan that provides minimum essential value must meet the affordability test 20

21 ◦ Step 3 – Determine affordability  Two easy ways to calculate  Determine income limit for Federal programs and set employee contribution at 9.5% of that  Federal Poverty Level, varies by state  Determine full-time employee with lowest wage and set employee contribution at 9.5% of that  What income can the employer use to determine that 9.5%?  W-2 Box 1 wages  Rate of pay  Employers who offer coverage, but make coverage unaffordable to some low wage employees may be subject to an IRS fee for those low wage employees. 21

22 ◦ Report:  MPI_6400: ACA Employer Tool Report  Employees shopping on Healthcare.gov (or state Marketplace)  Employees need information about their employer 22

23 ◦ ALE must start collecting data in January 2015  Employee ACA status information  Insurance information ◦ All ALEs will be required to report starting in year-end 2015 ◦ IRS has published draft forms and instructions  Public comment period closed November 3 rd ◦ Forms 1094-C and 1095-C are employer’s responsibility  MPAY will be ready to help employers with these forms ◦ Forms 1094-B and 1095-B generally be filed by employer’s insurance carrier  Self insured employers will likely require the plan’s Third Party Administrator to create forms and file on employer’s behalf 23

24 ◦ EE ACA Bulk Update 24

25 ◦ EE ACA Status Audit 25

26 ◦ Enhancements to M3 Employee ACA Status Audit tab  2014-Q4 release  Sorting on all grid columns  Show those employees with no ACA status record  Improved handling of rehires  Improve detection of gaps in service ◦ Enhancements to Payentry Employee ACA Status Audit tab  Early 2015  Show those employees with no ACA status record  Improved handling of rehires  Improve detection of gaps in service 26


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