1. EMPLOYER REPORTING REQUIREMENTS UNDER THE PPACA Department of Human Resource Management Business Symposium HR Live – What You Need to Know Today! November 19, 2015

2. 2 TOPICS ACA Designated Government Entity Reporting Agreement Agencies’ Responsibilities DHRM’s Responsibilities Definitions Under the ACA Full-Time Employee Measurement Period

3. November 19, 20153 TOPICS Counting Employees Contingent Workers Common Law Employee ACA Penalties ACA Reporting

4. Patient Protection & Affordable Care Act (PPACA) PPACA: Pervasively Problematic and Administratively Complex Act ACA: Atrociously Complex to Administer November 19, 20154

5. Patient Protection & Affordable Care Act (PPACA) Federal Agency charged with regulating and enforcing the ACA: November 19, 20155

6. Designated Government Entity Reporting Agreement DHRM owns Benefits Eligibility System (BES) Repository for Information Needed for ACA required reporting DHRM will provide the required ACA reporting based on data provided by agencies November 19, 20156

7. Reporting Agreement In order to report on behalf of the agencies, we must have an agreement designating DHRM as the reporting agent. To be signed by Agency Head and Sara Wilson Must be filed with healthcare plan November 19, 20157

8. DHRM’s Responsibilities Report Sections 6055 and 6056 information to IRS Employer’s summary of employee counts and number of eligible employees offered coverage (IRS Form 1094 - electronic employer transmittal) Report tax information to each full-time employee covered by the group health plan (IRS Form 1095 - individual statements mailed to home addresses) November 19, 20158

9. DHRM’s Responsibilities DHRM will take actions necessary to ensure that information is accurate. However, if returns or statements contain incorrect information or are deficient, DHRM will ensure that the corrected returns/statements are submitted to the IRS/affected employee(s). November 19, 20159

10. Agency’s Responsibilities Record and maintain: all information in BES timely and accurately information on employees identified as full-time under ACA Provide counts to DHRM of: full-time employees on a monthly basis total number of employees (head count) on a monthly basis November 19, 201510

11. Agency’s Responsibilities Provide these counts in the format and within the timeline prescribed by the DHRM Office of Health Benefits Certify that all counts required are accurate as reported November 19, 201511

12. Agency’s Responsibilities Review all contracts with contingent workers to ensure that contracts are written to clearly and appropriately assign responsibility for health care coverage for contingent workers November 19, 201512

13. Agency’s Responsibilities Review status of independent contractors and affirm that such contractors are not common law employees. Assume liability for penalties incurred under ACA for misclassification of employees and inaccurate reporting of employee data to DHRM November 19, 201513

14. Agency’s Responsibilities Monitor all hours worked by wage employees and certify compliance with 2013 Amendment to the Manpower Control Program. Review hours, duties, and contracts of contingent workers providing services and affirm that they are not common law employees.* November 19, 201514

15. ACA Definitions Applicable Large Employer Applicable Large Employer: 50 or more full-time equivalent employees will need to file an annual information return reporting whether and what health insurance they offered employees. In addition, they are subject to the Employer Shared Responsibility provisions. November 19, 201515

16. ACA Definitions Total Number of Employees: Head count of all employees Full-Time Employee: Works 30 hours or more per week on average during the employer’s measurement period. November 19, 201516

17. ACA Definitions Part-Time Employee: Works less than 30 hours on average during the employer’s measurement period. Includes wage employees (Not just salaried part-time employees) Measurement Period: May 1 st through April 30 th annually November 19, 201517

18. ACA Definitions Hours of Service Counting hours of service: Each hour for which an employee is paid or entitled to pay whether duties are being performed or not. Count leave time (annual, holiday, illness, incapacity (including disability), layoff, jury duty, military duty, leave of absence, etc.) November 19, 201518

19. ACA Definitions Hours of Service Which hours don’t count: any hour of service performed as a bona fide volunteer, as part of a Federal Work-Study Program (or a substantially similar program of a State or political subdivision thereof) or to the extent the compensation for services performed constitutes income from sources outside the United States. November 19, 201519

20. ACA Definitions Hours of Service On-Call Hours: Must use reasonable (but undefined) method All hours paid for call-back duty must be counted If the on-call duty is RESTRICTED, count hour for hour. November 19, 201520

21. ACA Definitions Hours of Service On-Call Hours: If flat rate is paid for number of hours of unrestricted on-call duty, project that flat rate based on worker’s normal hourly rate. Example: Worker’s hourly rate is $20 per hour. Worker is paid $50 for serving 24 hours of unrestricted on-call duty. Count 2.5 hours of service. November 19, 201521

22. Our Workforce – F/Q Status Full-time (40 hours per week) salaried employees Quasi-full-time (30 hours + per week) salaried employees Faculty (contractual) November 19, 201522

23. Our Workforce – F/Q Status Full-time Quasi-full-time Faculty (contractual)  Eligible (under ACA) for health- care coverage and counted as full- time employees November 19, 201523

24. Our Workforce – P Status Part-time salaried employees (20 – 29 hours per week) November 19, 201524

25. Our Workforce – P Status Part-time employees  Not eligible under ACA for healthcare coverage and not counted as full-time employees (May participate in state health insurance plan at full cost.) November 19, 201525

26. Our Workforce - Wage  Wage employees – Limited to working 1500 hours during the measurement period (approximately 29 hours per week on average)  Adjunct faculty – count hours based on formula November 19, 201526

27. Our Workforce - Wage Wage employees Adjunct faculty  Not eligible under ACA for healthcare coverage – not counted as full-time employees November 19, 201527

28. Wage Employees Seasonal Wage employees – Sub-category: Seasonal employees Work that is exclusively performed during specified periods of the year Period begins and ends each calendar year in approximately the same part of the year, e.g., summer, winter, General Assembly Six months or less  Not eligible under ACA for healthcare coverage November 19, 201528

29. Wage Employees Seasonal Wage employees – Sub-category: Seasonal employees Seasonal employees may work up to, or exceed 40 hours per week during the defined season or specified period of time, provided that the employees do not work more than 29 hours per week on average over the course of the applicable twelve month measurement period.  Not eligible under ACA for healthcare coverage November 19, 201529

30. Wage Employees Seasonal Wage employees – Sub-category: Seasonal employees November 19, 201530

31. Wage Employees Seasonal Wage employees – Sub-category: Seasonal employees If genuinely “seasonal” by ACA definition and their hours worked do not exceed the 1500 hour threshold  Not eligible under ACA for healthcare coverage and not counted as full-time employees. November 19, 201531

32. Wage Employees Variable Hours Wage employees – Sub-category: Variable Hour Employees Work that is exclusively performed on an irregular and/or unpredictable basis such that an employer cannot determine whether or not the employee will average more than 29 hours per week.  Not eligible under ACA for healthcare coverage November 19, 201532

33. Wage Employees Variable Hours Wage employees – Sub-category: Variable Hour Employees November 19, 201533

34. Wage Employees Variable Hours Wage employees – Sub-category: Variable Hour employees If genuinely “variable hour” employees by ACA definition and their hours worked do not exceed the 1500 hour threshold  Not eligible under ACA for healthcare coverage and not counted as full-time employees. November 19, 201534

35. Our Workforce – Contingent Workers Contingent workers contracted via: temporary service agencies or vendors under contract with the State and its individual agencies (VITA, DGS) or contracted with vendors through agencies independently or independent contractors. November 19, 201535

36. Our Workforce November 19, 201536

37. Contingent Worker Survey Will be sent to Agency Heads Agency Head to designate agency contact Common Law Employee Checklist to be completed on each contingent worker by procurement managers/program managers May need HR’s assistance to determine “common law employee” status November 19, 201537

38. Contingent Worker Survey Checklists are scored Each contingent worker’s name and engagement information will be recorded on the survey along with the “common law employee” score Report to DHRM November 19, 201538

39. Common Law Employees Determination of Common Law Employee Status November 19, 201539

40. Common Law Employee Test Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed. November 19, 201540

41. Common Law Employee Test 1. Relationship of the parties 2. Behavioral control 3. Financial control Other questions from IRS Employee Determination Form SS-8 November 19, 201541

42. Common Law Employee Test 1. Relationship of the parties November 19, 201542

43. Common Law Employee Test 1. Relationship of the parties November 19, 201543

44. Common Law Employee Test 2. Behavioral control November 19, 201544

45. Common Law Employee Test 2. Behavioral control November 19, 201545

46. Common Law Employee Test 3. Financial control November 19, 201546

47. Common Law Employee Test 3. Financial control November 19, 201547

48. Common Law Employee Test Other questions from IRS Employee Determination Form SS-8 November 19, 201548

49. Health Insurance Offered Under the ACA: Health insurance must provide Minimum Essential Coverage AND Be affordable November 19, 201549

50. Penalties Generally the employer is not subject to the Employer Shared Responsibility Payment (ESRP) unless at least one full-time employee receives a premium tax credit. November 19, 201550

51. Penalties (a) The employer does not offer health coverage or offers coverage to fewer than 95% of its full-time employees and the dependents of those employees, and at least one of the full-time employees receives a premium tax credit to help pay for coverage on a Marketplace; OR (b) The employer offers health coverage to all or at least 95% of its full- time employees, but at least one full-time employee receives a premium tax credit to help pay for coverage on a Marketplace, which may occur because the employer did not offer coverage to that employee or because the coverage the employer offered that employee was either unaffordable to the employee or did not provide minimum value November 19, 201551

52. Employer Shared Responsibility Payment Calculation: (1)If coverage is not offered or offered to fewer than 95% of full-time employees, the ESRP equals No. of Full-Time Employees (minus 30) Multiplied by $2,000. Agency having 230 employees: $400,000 November 19, 201552

53. Employer Shared Responsibility Payment Calculation: (2) If minimum essential coverage offered was not affordable, did not provide minimum value, or the employee was not one of the 95% offered minimum essential coverage, $3,000 annually for each full-time employee who receives the premium tax credit. November 19, 201553

54. ACA Employer Reporting In June 2015 DHRM communicated to you that our agency will file the necessary forms in early 2016 to comply with the Affordable Care Act (ACA) employer mandate to report health care coverage to employees and the Internal Revenue Service (IRS). November 19, 201554

55. ACA Employer Reporting IRS Form 1095 (individual statements mailed to home addresses) must be provided to employees by January 31 (February 1 this year since January 31 is on a Sunday); and IRS Form 1094 (electronic employer transmittal) must be filed by March 31. November 19, 201555

56. ACA Employer Reporting DHRM will rely on the information in the Benefits Eligibility System (BES) and a certification of total employee counts provided by participating employers to file the IRS reports. The information in BES and the employee counts must be accurate. November 19, 201556

57. ACA Employer Reporting To help reconcile the employer’s BES data, the following reports are available in HuRMan: BES Exception Report BES Enrollment Reports BES ACA Reconciliation Report November 19, 201557

58. ACA Employer Reporting BES Exception Report: Monthly report listing discrepancies found in BES that need attention. Note: system-generated SSNs that require follow-up are on this report. November 19, 201558

59. ACA Employer Reporting BES Enrollment Reports: Weekly reports of total membership in BES – one report shows participants and the other shows corresponding covered dependents. It is available on the 3 rd, 10 th, 17 th, and 24 th of each month. November 19, 201559

60. ACA Employer Reporting BES ACA Reconciliation Report: Monthly report of coverage offered to employees for the calendar year. The first official report will be available the first week in December for the period January – November 2015. November 19, 201560

61. ACA Employer Reporting Communications relating to this major ACA reporting requirement are distributed by OHB and are posted on the DHRM website. Pay special attention to communications with deadlines for reconciliations and certifications. November 19, 201561

62. ACA Employer Reporting The following published communications are specific to ACA reporting: ENews dated November 9, 2015 ENews dated October 30, 2015 ENews dated June 9, 2015 Numbered Memo 15-05 – 9/14/15 November 19, 201562

63. Summary November 19, 201563 “The more you explain it, the more I don’t understand it.

64. November 19, 201564 QUESTIONS Send ACA questions to the Policy mailbox or your assigned HR Management Consultant. policy@dhrm.virginia.gov Send ACA reporting questions to the OHB mailbox. ohb@dhrm.virginia.gov