Presentation on theme: "UPDATE ON ACA. Transition Relief for 2014 The IRS issued Notice 2013-45 Transition Relief for 2014 regarding: Information reporting by insurers and."— Presentation transcript:
Transition Relief for 2014 The IRS issued Notice 2013-45 Transition Relief for 2014 regarding: Information reporting by insurers and self insureds. Penalty for failure to meet employer shared responsibility.
Delayed - Information Reporting Large employers reporting related to health insurance offered/not offered to full time employees. Insurers and self insuring employers regarding minimum essential coverage. Purpose of delay is to provide additional time for employer/reporting entities to provide the IRS input as to regulations for reporting information. Translation: IRS does not know what to do.
Penalties Delayed Penalty for failure to offer required coverage to employees who work on average 30 hours or more per week. Penalty if essential benefits, affordability and minimum value are not in compliance. It is assumed that the major insurance providers will be giving guidance regarding compliance with coverage and Summary of Benefits and Coverages.
What Employer ACA requirements remain effective in 2014? Summaries of Benefits and Coverage must be distributed during open enrollment for the 2014 coverage period and must indicate whether the plan provides minimum value. Exchange Notices: Employers must distribute “health insurance marketplace” notices to all employees by October 1, 2013, and thereafter to new employees upon hire. Employers will be required to complete a 12 page form entitled, “Application for Health Coverage and Help Paying Costs” when requested by employees who are applying for advance premium tax credits when purchasing coverage on the “ health insurance marketplace.”
ACA requirements continued Employers must continue to report the aggregate value of health coverage on Forms W-2. New hire waiting period for health care benefits limited to no longer than 90 days. No pre-existing condition limitations permitted in plan design. Required coverage of clinical trials. Wellness programs must comply with 2014 standards. Essential Benefits.
Employer Shared Responsibility Essential Benefits: Employer must offer essential coverages to full time employees or full time equivalent employees. Affordability: Employer must offer affordable coverage (the employee’s share of the coverage cost cannot exceed 9.5% of the employee’s household income). Minimum Value: Although this requirement is waived, employer must still report whether a plan provides minimum value on the Summaries of Benefits and Coverage.
Employer Fees in 2014 ACA Fee: Patient-Centered Outcome Research Institute Fees (“PCORI Fees”). The fee will be used to fund comparative effectiveness research. Beginning 2014 the fee will be $2.00 per participant per year indexed until 2019. Reinsurance Assessment Fee – The revenue from this fee will be used to stabilze premiums in the individual market for 2014- 2016. The fee for 2014 is $63.00/year or $5.25 /month per covered life. The estimated fee amounts after 2014 are $42/year (2015) and $26.25 (2016).
Employer Mandates - 2015 Beginning January 1, 2015 Employers with 50 or more employees must offer health care to all full–time or full-time equivalent employees. Insurance must provide minimum essential coverage, minimum value and affordability. A penalty of $2,000 per employee minus the first 30 employees for failure to offer health care to at least 95% of eligible full time employees. An employer that offers coverage to at least 95% of it’s employees will be assessed a penalty of $3,000 per employee if an eligible employee receives a premium tax credit or subsidy and obtains coverage through a state exchange because the coverage offered is deemed unaffordable or fails to provide minimum value.
Determining Full Time Employees All current full time employees as determined by the employer. Generally those employees are already receiving health care benefits. Other employees who average 30 hours worked per week including paid time off (PTO) e.g. vacation, holiday, illness and leave of absence, etc. Hourly employees = actual hours worked plus PTO Adjunct faculty = actual worked plus PTO
Employer Measurement Period Used to determine average hours worked for the Employer. Records must be kept to assist in determining full time status. Employers may want to plan on an anticipated required 12-month Standard Measurement Period commencing November 1, 2013. Effective January 1, 2015 you must meet all employer mandates or pay penalties.
Unresolved Issues Method of calculating Adjunct hours worked must be “reasonable” to be determined by the Employer. IRS has determined that it would NOT be reasonable to only count classroom hours or other instruction time and to not include other duties such as class prep time, grading or required tasks outside of the classroom. There is debate concerning class time, credit hours, contact hours, equated hours and how it should be calculated as hours worked taking into account the tasks outside the classroom: 1:1, 1:2 and 1:3 or a variant. The IRS may ultimately establish a mandatory calculation.
Things To Watch For….. Non-teaching employees in multiple positions. Adjunct faculty in multiple positions: credit, non-credit or non teaching capacities. Adjunct faculty and substitute teaching. Independent contractors determined to be employees. Inherent conflict between ACA and Act 152 of 2011.
RESOURCES www.fas.org www.healthcare.govwww.healthcare.gov. - health reform information http://www.irs.gov/uac/Affordable-Care-Act-Tax- Provisions-Home www.cms.hhs.govwww.cms.hhs.gov - essential benefits www.dol.gov/ebsa/healthreformwww.dol.gov/ebsa/healthreform - exchange notice