Year-End Webinar - Affordable Care Act Preparations
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Transcript Year-End Webinar - Affordable Care Act Preparations
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
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◦ Review definitions on WebHelp at:
http://webhelp.mpay.com/#Millennium3/ACA/ACADefinitions_M3.htm
◦ 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
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◦ 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 50-99 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
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◦ 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
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◦ 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
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Month
Full-time
Employees
Part-time
Hours
Full-time
Equivalent
Totals
Seasonal
Employees
Less Seasonal
Employees
January
32
1800
15
47
0
47
February
32
1800
15
47
0
47
March
32
1800
15
47
0
47
April
32
1800
15
47
0
47
May
75
600
5
80
45
35
June
75
600
5
80
45
35
July
75
600
5
80
45
35
August
75
600
5
80
45
35
September
32
1800
15
47
0
47
October
32
1800
15
47
0
47
November
32
1800
15
47
0
47
December
32
1800
15
47
0
47
Average
46
11
58
43
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Month
Full-time
Employees
Part-time
Hours
Full-time
Equivalent
Totals
Seasonal
Employees
Less seasonal
Employees
January
50
2400
20
70
18
52
February
32
3600
30
62
0
62
March
32
3600
30
62
0
62
April
32
3600
30
62
0
62
May
32
3600
30
62
0
62
June
32
3600
30
62
0
62
July
32
3600
30
62
0
62
August
32
3600
30
62
0
62
September
32
3600
30
62
0
62
October
32
3600
30
62
0
62
November
60
1800
15
75
28
47
December
60
1800
15
75
28
47
Average
38
26
64
58
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◦ M3: Standard New Hire screen requires ACA Status
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◦ M3: Employee ACA Status screen
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◦ Payentry: New Hire screen requires ACA Status
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◦ Payentry: Employee ACA Status screen
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What about all the existing employees in the system?
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◦ M3: Employee ACA Status Bulk Update
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◦ 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
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What if I don’t know every employee’s status?
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◦ M3: Employee ACA Status Audit
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◦ 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)
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◦ Variable hour measurement periods explained
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◦ 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
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◦ 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.
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◦ Report:
MPI_6400: ACA Employer Tool Report
Employees shopping on Healthcare.gov (or state Marketplace)
Employees need information about their employer
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◦ 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 3rd
◦ 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
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◦ EE ACA Bulk Update
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◦ EE ACA Status Audit
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◦ 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
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