Transcript Health Care Reform - SECC Human Resources Department

Complying With the New
Affordable Health Care
Act (“ACA” or “Obamacare”)
Southeastern California Conference
Treasurer’s Workshop
November 10 , 2013
Joel D. Peterson, Attorney at Law
Law Offices of Joel D. Peterson
It’s coming whether we like it or not…
What Is the Affordable Care Act?
• Commonly known as “Obamacare.”
• President Obama signed the Patient Protection and
Affordable Care Act on March 23, 2010, upheld by the
U.S. Supreme Court in June 2012.
• Meant to be comprehensive health reform and focuses on
provisions to expand coverage, control health care costs,
and improve health care delivery system.
• Employer’s Concern: “Pay or Play” - If you have 50 or
more full time employees, you have to provide mandated
coverage or pay a penalty as of January 1, 2015.
Employer Mandate (“Pay or Play”)
Principal concerns for employers:
• Labor cost increases resulting from
 Higher benefits cost to meet minimum health
plan requirements,
 Potentially more employees electing plan
coverage because of individual mandate, and
 Employer having to pay penalties if it does
not comply with the law.
• Evolving guidance and unanswered
questions regarding compliance.
Employer Mandate (“Pay or Play”)
• Effective January 1, 2015.
• Applies to employers with 50 or more full-time
employees
• Beginning in 2015 (was 2014), Employer pays
penalty if it
 does not offer “minimum essential coverage” to at least
95% of its full-time employees (and--subject to a
transition rule for 2015--dependents); or
 if the employee share of the premium exceeds 9.5% of
employee’s income.
 There is no requirement under ACA to offer health
coverage to part-time employees.
Calculating Full Time vs. Part time Employee
• Standard Measurement Period / Stability Period
"safe harbor" for determining whether Employee is a full-time
employee
•“Standard Measurement Period”
▫is three to twelve months.
▫examine whether an employee averaged at least 30 hours per week
during the Standard Measurement Period
•"Stability Period”
▫A Stability Period begins after the Standard Measurement Period.
▫The Stability Period must be at least 6 consecutive calendar months and
must be at least as long as the Standard Measurement Period.
▫The Stability Period for that Part-Time Employee cannot be longer than
the Standard Measurement Period.
Calculating Hours of Service
Hours of Service:
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Each hour for which an employee is paid, or entitled
to payment, for work for the employer; and
Each hour for which an employee is paid for
vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty, or leave of
absence.
Determination:
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Hourly employees. Based on actual hours worked
and hours for which payment is due.
Non-hourly employees 3 alternatives:
(i) Actual hours;
(ii) Days-worked equivalency of 8 hours/day; or
(iii) Weeks-worked equivalency of 40 hours/week.
• Hours of service used to determine benefit
eligibility will include:
Paid Performance of Duties
Paid Leave
Sick Leave
Jury Duty
FMLA
Disability
Leave of Absence
Summer Leave/Break
SECC Policy
• The Conference will create a policy to address the
determination and administration of benefits for
compliance with the Affordable Health Care Act
• Employees must be offered choice of the Conference
medical plans
• Medical benefits will be offered to the employee only, with
the option to ‘buy in’ for the dependents
• Conference will take the lead in auditing timecards for
benefit eligibility
• Conference will work in tandem with churches to review
and monitor employment status of employees
• Churches should review all paid positions
currently being supported by the local giving and
consider the financial impact of this Federal
mandate
• Conference will reserve the right to make
changes in employment status to maintain
compliance with the Affordable Health Care Act
• Failure to comply would incur a penalty that
could be assessed to all employees on the
Conference payroll, for example:
1800 employees x 166.67/mo = $360,000
It is imperative that all employees are:
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Supervised
Completing accurate timecards
reflecting all hours worked
Working within their assigned FTE
Not volunteering for duties they are
paid to perform
Appropriately classified (exempt vs.
non-exempt status and independent
contractor vs. employee)
Proper Classifications:
1. Part-time vs. Full-time
2. Independent Contractor
3. Volunteer
Classification Important:
• ACA hour tracking (IRS responsible - also
decides who is an employee or not)
• Payroll taxes (IRS and EDD)
• Work Comp Coverage
• Compliance with Wage & Hour law - minimum
wages. Going up in July ‘14 ($9/hr) and January
‘16 ($10/hr)
• Liability Insurance
What is Part-time?
• Must make the actual calculation and track each
hour worked
• ACA says under an average of 30 hours
• Must have evidence to show that even a full-time
salaried employee is averaging 30 hours or
more.
What is an Independent
Contractor?
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Is there a valid, written independent contractor agreement? Y
Do you instruct or supervise the person while he or she is working? N
Can the worker quit or be discharged (fired) at any time? N
Is the work being performed part of your regular business? N
Does the worker have a separately established business? Y
Is the worker free to make business decisions that affect his or her ability to profit
from the work? Y
Does the individual have a substantial investment that would subject him or her to
a financial risk of loss? Y
Do you have employees who do the same type of work? N
Do you furnish the tools, equipment or supplies used to perform the work? N
Is the worker paid a fixed salary, an hourly wage or based on a piece rate basis? N
Did the worker previously perform the same or similar services for you as an
employee? N
What is a Volunteer?
• Can’t volunteer doing same job or duties
• Must do work without pay
▫ No expected remuneration
▫ No barter
• Under California Labor Code, a volunteer is defined as
someone who works for free. Such work may be
performed for a charitable or civic purpose.
An Affordable Care Act Policy and further
guidance from your SECC HR Department to
come.
“Please be patient…the Government is not
finished with this yet…”
Thank You.
Q&A