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
◦ 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
◦ 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
◦ 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
◦ 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
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
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
◦ M3: Standard New Hire screen requires ACA Status 9
◦ M3: Employee ACA Status screen 10
◦ Payentry: New Hire screen requires ACA Status 11
◦ Payentry: Employee ACA Status screen 12
What about all the existing employees in the system? 13
◦ M3: Employee ACA Status Bulk Update 14
◦ 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
What if I don’t know every employee’s status? 16
◦ M3: Employee ACA Status Audit 17
◦ 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
◦ Variable hour measurement periods explained 19
◦ 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
◦ 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
◦ Report: MPI_6400: ACA Employer Tool Report Employees shopping on Healthcare.gov (or state Marketplace) Employees need information about their employer 22
◦ 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
◦ EE ACA Bulk Update 24
◦ EE ACA Status Audit 25
◦ 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