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AFFORDABLE CARE ACTCOMPLIANCE GUIDE(A.K.A. YOUR GUIDE TO ACA SUCCESS)
A C A C O M P L I A N C E G U I D E
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L E G A L D I S C L A I M E RACA Compliance, Publications and Content
The ACA Compliance Guide is intended to be used as a handbook for the reader to reference in conjunction with, but not
exclusive of, official regulatory information. The laws, regulations, rulings and other material contained herein may change
over time, and the reader should seek out the most current materials. This guide does not include everything that you need to
know. We strongly encourage you to read and understand all laws and regulations that are applicable for ACA compliance and
to follow them closely.
We present this guide for informational purposes only. The information in the ACA Compliance Guide should not be relied
upon or construed as legal advice or legal opinion. It is not an offer to represent you, nor is it intended to create an attor-
ney-client or other confidential, advisory relationship. The content of any Internet e-mail sent to us or any of our personnel will
not create an attorney-client relationship or other confidential, advisory relationship, and will not be treated as confidential.
You should not rely upon the information presented in the ACA Compliance Guide to make legal or other professional decisions
without seeking personal advice from an attorney or other professional.
We are not responsible for the content of any third-party website or information referenced within the guide. If any such third
party site violates any laws or ethical rules of your jurisdiction, we are not available to represent you. End users may view and
use the content of this guide for personal use. All other uses are prohibited. The ACA Compliance Guide does not offer any
guaranteed compliance with any law. By using the ACA Compliance Guide as a point of reference, the user takes full responsi-
bility for meeting the requirements of ACA and indemnifies us from any claims that arise from its use.
CO N T E N T S
ACA
3
T H E PAT I E N T P R OT E C T I O N A N D
A F F O R DA B L E C A R E AC T (P PAC A )
A N D W H AT YO U N E E D TO K N OW
A C A S E T S M I N I M U M CO V E R A G E S TA N D A R D S F O R
H E A LT H C A R E I N S U R A N C E P L A N S A N D R E Q U I R E S A L L
I N D I V I D U A L S T O E N R O L L I N A P L A N O R PAY A P E N A LT Y.
T H I S ‘ P L AY O R PAY ’ O P T I O N I S K N O W N A S T H E S H A R E D
R E S P O N S I B I L I T Y M A N D AT E . E M P L OY E R S A L S O H AV E
A S H A R E D R E S P O N S I B I L I T Y M A N D AT E , M A K I N G
C A R E F U L T I M E K E E P I N G A N D
S C H E D U L I N G E S S E N T I A L .
4
5
W H Y AC A I SM A N DATO RY
ACA defines 10 categories of
service that all healthcare plans
must cover. The stated goal is to
extend essential healthcare to all
individuals. Shared responsibility
is mandated to help cover costs.
Every health plan must cover: • Ambulatory patient services • Emergency services • Hospitalization • Pregnancy, maternity, and newborn care • Mental health and substance use disorder services
A C A C O M P L I A N C E G U I D E
• Prescription drugs• Rehabilitative and habilitative services and devices• Laboratory services• Preventive and wellness services and chronic disease management• Pediatric services
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I N D I V I D UA L R E S P O N S I B I L I T Y A N D O P T I O N S
Individuals can obtain insurance
through their employer, an exchange,
or a qualified program such as
Medicare or Medicaid. Alternatively,
they can pay an annual penalty or
request a hardship exemption.
A C A C O M P L I A N C E G U I D E
A C A C O M P L I A N C E G U I D E
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D I D YO U K N OW ?
Almost half of all individuals get healthcare
coverage through their employer.
Em
ployer
49%
20%14%
9%
7% 2%
MedicaidMedicare
Uninsured
Non-GroupOther Public
CLICK HERE TO SEE YOUR STATE BREAKDOWN
Source:Kaiser Family Foundation estimates based on the Census Bureau’s March 2014, March 2015, and March 2016 Current Population Survey (CPS: Annual Social and Economic Supplements).7
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E M P LOY E R R E S P O N S I B I L I T I E S A N D O P T I O N S
Pay attention to staffing levels.
A C A C O M P L I A N C E G U I D E
Rules are based on total
<50 FTEFull-Time Equivalent (FTE) WORKERS EACH MONTH
may be eligible for a tax credit
50+ FTE for the month —subject to shared responsibilities for month
50+ FTE for prior year (average) —subject to shared responsibilities for month
FTE
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O P T I M I Z I N G AC A CO M P L I A N C E E F F O R T S A S A N E M P LOY E R
Control schedules and track hours by
employees daily. Detailed timekeeping
and scheduling help employers forecast
costs, even in organizations with
seasonal or cyclical work.
A C A C O M P L I A N C E G U I D E
Compliance begins with establishing the total
1. TFTEMPLOYEES EACH MONTHTo do this, employers must know total:
Full-time employees – defined as workingat least 30 hours/week or 130 hours/month
2. PTH Part-time employees – Total hours worked
FTE = TFT + (PTH/120)for any given month
FTE
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D E T E R M I N I N G W H E T H E R A N E M P LOY E E I S F U L L-T I M E
A C A C O M P L I A N C E G U I D E
Employers have 3 options for determining whether a new hire is full-time according to ACA
DESIGNATION
Classify the employee
as full-time at time of
hire.
MONTHLY MEASUREMENT
Count hours at end of each
calendar month.
• 130 hours during the month
is full-time that month
• Detailed timekeeping is a
must
LOOK BACK MEASUREMENT
Use measurement periods to establish whether
employee considered full-time for future periods.
• Only available when it is not possible to determine at
time of hire whether employee will work 30 hrs/wk
• 4 different measurement periods used in determining
status
• 30 hours/wk during the month or at least 130 hours
during month is full-time that month
• For employees not paid hourly, employer can calculate
based on hours worked, days worked equivalent (at
least 1 hr/day) or weeks worked (at least 1 hr/week)
• Detailed timekeeping is a must1 0
Add up all hours worked
by part-time employees
during the month and
divide by 120.
ROUND the result down
to the nearest whole
number. If the result is less
than one, however, round up
to one (1) FTE. In this exam-
ple, 4.16 rounds down to 4.
500
4.16÷ 120
For Example: 3 part-timers
x 110 hrs/mo + 2 part-timers
x 85 hrs/mo = 500 hours ÷
120 = 4.16
This is easy if you are using
a timekeeping system.
Add your result to the number
of full-time employees
Calculating Your Monthly FTE (Full-Time Equivalent)
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3
4+20=24
FTE
EEs FTE
=20 FT5 PT 24
Check eligibility for tax credit
based on four criteria.
• <25 FTE
• paid average <$50,000
(indexed annually)
• paid 50% or more of
health insurance
premium
• purchased coverage
through SHOP
marketplace
In this example, an employer
with 20 full-time employees
and 5 part-time employees
working less than 30 hrs/week
for a total FTE of 24 might
qualify for the tax credit.
1 1
YES
NO
NO
NO
YES
Penalties and Incentives forEmployers Under ACA During 2017
Start Here
NO
YES
YES
YES
NO
Did the employer have at least
50 full-time equivalent employees
in the previous year?
Penalties do not apply to employers
with fewer than 50 full-time
equivalent employees.
If the employer has <25 full-time
employees with average annual wages of
about $50,000 or less and covers at least
50% of full-time employees’ premium
costs, the employer may be eligible for a
health insurance tax credit to purchase
coverage through the SHOP Marketplace.
*A dependent child is defined as a child of an employee who is under the age of 26. Employers do not face a penalty under the ACA if they do not offer coverage to the spouse of a full-time employee.
**Affordability is determined by reference to the taxpayer’s household income (i.e., the employee’s required contribution for self-only coverage should not exceed 9.69%). Since employers generally do not know the worker’s household income, to determine if
an employer may be subject to penalty, the employer can measure 9.5% against three separate safe harbor amounts (the worker’s Form W-2 wages, the worker’s hourly rate of pay as of the first day of the coverage period, or the federal poverty line for a single
individual). Note that a worker’s and a the worker’s dependents eligibility for premium tax credits or costing sharing subsidies are based on family income; not the safe harbor amounts. Source: Henry J. Kaiser Family Foundation, KFF.org.
NICE!
YIKES!
Does the employer offer health
insurance coverage to at least 95% of
its full-time workers and their
dependent children*?
Did at least one full-time employee
receive a premium tax credit or
cost-sharing subsidy in the federal or
state marketplace?
Did at least one full-time employee
receive a premium tax credit to help
pay for coverage in a Marketplace?
The employer must pay a
penalty for not offering coverage
that is affordable and provides
minimum value.
The employer must pay a
penalty for not offering coverage.
Did at least one full-time employee
receive a premium tax credit to help
pay for coverage in a Marketplace?
Does the insurance pay for at least
60% of the covered health care
expenses for a standard population
(called minimum value)?
Do any employees have to pay more
than the 9.69% of their household
income** for the employer coverage
(called affordable coverage)?
There is no penalty
payment required
for the employer
The penalty for each month the employer
fails to offer coverage is $2,260 divided by
12, multiply the number of full-time
employees (minus up to 30).
The penalty for each month is $3,390
divided by 12, for each full-time employee
receiving a premium tax credit that month
(up to a maximum of $2,260 divided by
12, multiply the number of full-time
employees (minus up to 30)).
YIKES!
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A C A C O M P L I A N C E G U I D E
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AC A R E P O R T I N G R E Q U I R E M E N T S Employers with 50 or more FTE employees must complete a 1095-C: Employer-Provided Health
Insurance Offer and Coverage form for each full-time employee and distribute to them annually.
A 1094-C: Transmittal of Employer-Provided Health Insurance Offer and Coverage Information
Returns form and all 1095-Cs must be submitted to the IRS.
W-2 Reporting Requirements
In addition, employers that filed 250 or more W-2s the prior year must include the cost of
employer-sponsored health coverage on the current year W-2s. This includes employer
and employee contributions.
For more information on W-2 filing requirements, visit
T H I S L I N K H E R E
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W H E R E TO B E G I N
Proactively manage your workforce time and attendance.
Schedule part-time employees to maximize hours.
Automatically calculate actual FTE for prior periods and
forecast FTE for upcoming periods. Run reports that
identify full-time status and FTE fraction by employee.
P U T A T I M E K E E P I N G
A N D S C H E D U L I N G
S Y S T E M I N
P L AC E TO T R AC K
E M P LOY E E DATA
A N D H O U R S .
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A C A C O M P L I A N C E G U I D E
U N D E R S TA N D I N G M E A S U R E M E N T P E R I O D S
C A N G E T A L I T T L E CO M P L I C AT E D, A N D
E M P LOY E R S W H O A R E S U B J E C T TO T H E
M A N DAT E S H O U L D S E E K P R O F E S S I O N A L
L E G A L A DV I C E . F O R M O R E I N F O R M AT I O N
P L E A S E G O TO :
T H I S L I N K H E R E
A C A C O M P L I A N C E G U I D E
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A C A C O M P L I A N C E G U I D E
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O U R WO R K F O R C E M A N AG E M E N T S U I T EI N C L U D E D F E AT U R E S T H AT S U P P O R T A C A CO M P L I A N C E
ACA
Employee data (title, gender, date of hire, term date, EE ID, etc.)
Track hours worked
Auditable reporting
Work Week and Work Month reports (calculation of employee status reports)
Employee status (FT, PT)
Staffing and schedule management
Communication/collaboration via email & text
Dashboard— accrued & total overtime hours
Timekeeping data records
Hours’ threshold indicator and alerts
Time card approvals
Finalized pay period (lock-down data)
Employee groups
Time card audit
Manageable, editable time cards (with audit trail)
Alert indicators (overtime, max hours, etc.)
Daily Auto Email report (view OT, missing punches, total hours)
Schedule Preferences
Proactive Time Management
Forecasting of hours
Mobile Access (Punch IN/OUT, tracking hours for off-site employees)
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A C A C O M P L I A N C E G U I D E
L E T U S H E L P YO U I M P L E M E N T O U R
WO R K F O R C E M A N AG E M E N T S U I T E
We’re ready to help you get the peace of mind you’re looking for and deserve.
Call your workforce management solutions providerTo learn how we can help with ACA compliance.
Disclaimer: The ACA reporting requirements provided are subject to change. See page 2.
For more information follow these links:
http://go.cms.gov/1V7bz6F
http://1.usa.gov/1Vu6NPC
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