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Employers and The Affordable Care Act – Why Are We Still Confused? Employers and The Affordable Care Act – Why Are We Still Confused?

Employers and The Affordable Care Act – Why Are We Still Confused? - PowerPoint Presentation

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Employers and The Affordable Care Act – Why Are We Still Confused? - PPT Presentation

Presented by Katherine L Radakovich MBA SPHR Chief Human Resources Officer Chartiers Center Welcome Presenter introduction Show respect for differing ideas thoughts and questions Silence electronic devices ID: 935626

radakovich coverage katherine mba coverage radakovich mba katherine sphr employees employer health employee compliance 2015 employers time plan requirements

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Slide1

Employers and The Affordable Care Act – Why Are We Still Confused?

Presented by: Katherine L. Radakovich, MBA, SPHRChief Human Resources OfficerChartiers Center

Slide2

Welcome

Presenter introductionShow respect for differing ideas, thoughts, and questionsSilence electronic devicesTime for Q & A will be provided at the end of the presentationThis is not a substitution for legal advice

Katherine L. Radakovich, MBA, SPHR

2

Slide3

Seminar Objectives

Using the information provided today, participants and Employers will be able to:Recognize and understand key components of the ACA Differentiate and analyze compliance requirementsConfidently create an action plan to comply with the ACA and be ready for a DOL audit

Katherine L. Radakovich, MBA, SPHR

3

Slide4

How do you feel about compliance and the ACA?

Katherine L. Radakovich, MBA, SPHR

4

Slide5

PPACA

PPACA –Patient Protection and Affordable Care Act - ACAOne of the most significant laws affecting the workplace in recent historyTime to reshape benefit packagesCommunication is keyCompliance delays

Interpretation and guidance changes on a daily basis

Katherine L. Radakovich, MBA, SPHR

5

Slide6

Recent Top 5 Employer Concerns

May 2015 Fisher and Phillips LLP released 5 current employer concerns:The employer mandateThe individual mandateWellness programs

Reporting requirements

Automatic enrollment and nondiscrimination regulations

Katherine L. Radakovich, MBA, SPHR

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Slide7

Understand what is (and is not) delayed

Employer Mandate2015 – large employers (with 100+ employees) are required to offer ACA compliant (affordable)

health care coverage to 70% of their employees. 95% in

2016 (1/1/15)

Employers with 50-99 – delayed requirement until

2016 (1/1/16)

Also known as “shared responsibility” or “play or pay”

Katherine L. Radakovich, MBA, SPHR

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Slide8

Understand what is (and is not) delayed

2014 – Requirements (not delayed)

Eliminating pre-existing conditions exclusions

Imposing the 90 day waiting period

Eliminating annual dollar limits on essential health benefits

Include coverage for clinical trials

Eliminating maximums on annual deductions and limiting out of pocket costs

Eliminating the ability of grandfathered plans to exclude adult children who have access to other employer coverage

Katherine L. Radakovich, MBA, SPHR

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Slide9

2014-2015 Requirements

Individual Coverage MandateIndividuals are required to obtain health coverage or pay a penaltySupreme Court rules it is constitutional

Health Insurance Exchanges

States establish insurance exchanges that sell qualified health plans to individuals and small business – or participate in the Federal Exchange

Katherine L. Radakovich, MBA, SPHR

9

Slide10

2014-2015 Requirements

No Pre-existing Condition LimitsElimination of ALL pre-existing condition exclusionsDependent Coverage Expansion

Grandfathered plans may no longer deny coverage to dependent children even if they are eligible for other employer coverage

Spouses are not considered dependents

Katherine L. Radakovich, MBA, SPHR

10

Slide11

2014-2015 Requirements

Limited Waiting Periods Group health plan waiting periods may not exceed 90 daysCoverage must begin on the 91st day of employment

June 2014 – Final Rule - Orientation period can last 1 month before beginning the 90 day waiting period

This rule applies to plan years starting January 1, 2015.

Final rule defines the 1 month orientation period beginning the first of of employment and ends the same day in the following month. Coverage must start by the first day of the fourth month.

Katherine L. Radakovich, MBA, SPHR

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Slide12

2014-2015 Requirements

Wellness ProgramsEmployers can offer employees incentives up to 30 % (may increase to 50%) of the cost of coverage for participation in wellness programsHIPAA Wellness Program Rule issued

Katherine L. Radakovich, MBA, SPHR

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Slide13

2014-2015 Requirements

Automatic EnrollmentEmployers with more than 200 full time employees are required to auto-enroll employees in the health plan Delayed until regulations are issued

Employer Shared Responsibility

Employers with 100 + employees may face a penalty if the group health plan does not provide affordable, minimum essential coverage to at least 70% of full time employees.

Katherine L. Radakovich, MBA, SPHR

13

Slide14

2014-2015 Requirements

Provision applies if:The employer does not offer minimum essential coverage to all full-time employees and their dependentsThe employer offers minimal essential coverage that is not considered affordable or does not provide minimum value

Katherine L. Radakovich, MBA, SPHR

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Slide15

2014-2015 Requirements

Additional reporting requirementsEmployers are required to file annual reports with the IRS (and provide annual statements to employees)Must contain specific plan information, and certification of minimum essential coverageReports due to employees by January 31

st

of the following the year the report is submitted to the IRS

Katherine L. Radakovich, MBA, SPHR

15

Slide16

Are you ready for a DOL audit?

Affordable coverageWhat is considered affordable coverage under the employer mandate?

Employee’s contribution to self only benefits cannot exceed 9.5% of the employees household income

Employers have no practical way of knowing what an employee’s “household income is”

Employees can shop on the exchange if the employer does not provide affordable or minimum coverage

Employees may qualify for federal tax credits

In 2015 large employers will face fines of $2000 per employee, for failure to provide compliant coverage AND employees qualify for tax credits (2016 Mid-size employers must comply)

Small employers (50 or less employees) are not required to provide health care coverage

Katherine L. Radakovich, MBA, SPHR

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Slide17

Who is eligible for tax credits?

An employee qualifies for tax credits when:Singles who make less than $46,000

Family of 4 who earns less than $94,000

Employers may pay fines up to $2,000 per employee over the first 30 employees

Employers may pay fines up to $3000 per each employee that actually receives tax credits

If an employee seeks coverage on the exchange AND the employer offers compliant coverage the employee will not receive tax credits and the employer will not be assessed a penalty

Katherine L. Radakovich, MBA, SPHR

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Slide18

Safe Harbor Methods

To be compliant with affordable coverage – utilize safe harbor methods:Employees required premium co-share for the lowest cost, self-only coverage that provides minimum value not being greater than 9.5% of the employee’s W-2 taxable income

Taxable calculation currently excludes:

Employee’s contribution to health savings account

Employer 401(k) plans, or other nontaxable Section 125 plans (cafeteria plans)

Cost of Dependent coverage

Not calculated in the affordable coverage percentage

Katherine L. Radakovich, MBA, SPHR

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Slide19

Safe Harbor Methods

Coverage is minimum value ifThe plan covers 60% of an employee’s medical expenses. (Actuarial value)

Minimum value is provided prior to Wellness program participation

Minimum value calculation may be calculated assuming that every employee satisfies the terms of the program relating to prevention or reduction of tobacco use.

Katherine L. Radakovich, MBA, SPHR

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Slide20

Full Time Employees

Under the Employer Mandate:Coverage must be provided to employees who work an average of 30 or more hours per weekThe measurement period to meet the 70% coverage and then 95% coverage levels can be 3 -12 months

Stability period cannot be shorter than 6 months

Katherine L. Radakovich, MBA, SPHR

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Slide21

Qualifying for “fewer than 100 employees”

Employers must certifyEmployer must average 50 full time employees – includes part time employees’ whose combined hours equal full time employee equivalents

Feb 2014 – through the end of December 2014 – the employer cannot reduce its workforce or hours of service to meet the condition of having fewer than 100 employees

Must maintain and/or not reduce the health coverage offered as of February 2014 until the last day of the 2015 plan year

Employers are not penalized for employees who receive Medicaid coverage

Mandate delay adds to the penalty confusion

Katherine L. Radakovich, MBA, SPHR

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Slide22

Who is a Full Time Employee or a Full Time Employee Equivalent?

FTE = 30 hours/week average (130 hours/month)Hours include ANY PAID LEAVEReasonable counting methodMonth to Month

Penalty determined on a monthly basis

3 month breather if coverage is offered the 1

st

day of the 4

th

month

Measurement and Stability Period

May use different methods or measurement periods for different classes

Hourly v. Salary, Union v. Non-Union, different states NOT variable hour v. non variable hour

Katherine L. Radakovich, MBA, SPHR

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Slide23

Who is a Full Time Employee or a Full Time Employee Equivalent?

Break in service/Leave of Absence RulesMust treat rehired employees as new employeesIf period of no service was 13 weeks or moreUnder rule of parity

Treat as continuing employee as same status for that stability period

For employees returning after special unpaid leave (FMLA, Jury) – exclude special unpaid leave or credit hours at average weekly rate

Katherine L. Radakovich, MBA, SPHR

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Slide24

Health Care Strategy Planning

Keep in mind the following when making decisions about employee health plans:The actual cost of play or pay

The effect of changing the composition of the workforce – reducing employee hours, hiring part time, etc.

How to treat retirees – do you offer retiree coverage?

Understand future cost savings of wellness plans

Eliminate coverage for part time employees

No longer offer to cover employee spouses

Katherine L. Radakovich, MBA, SPHR

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Slide25

Planning for Federal Reporting Requirements in 2015

New regulatory reporting in 2015Evaluate the processes you are using to track an employee’s key information:

Address

Social Security Number

Number of individuals covered any given time on the health plan

Dates employee was covered during a calendar

This information will be required for reporting

Katherine L. Radakovich, MBA, SPHR

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Slide26

Planning for Federal Reporting Requirements in 2015 IRS Reporting

Internal Revenue Code (Title 26)Information gathering begins in 2015First reports filed in 20166055 and 6056Information

gathering begins in

2015

Draft form available as of 8/28/14

Watch for further communication – final rulings

Completed by anyone who provides minimum essential health coverage

Section 6056 reporting applies only to large employers

Currently the IRS is evaluating reporting methods

Katherine L. Radakovich, MBA, SPHR

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Slide27

Planning for Federal Reporting Requirements in 2015

Who will be responsible for reporting requirements?HR’s new roleHR will keep employees informed on employer health coverage and about the exchanges

Katherine L. Radakovich, MBA, SPHR

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Slide28

Self Compliance Tool Affordable Care Act Provisions

Be ready for an auditUse the self compliance toolDoes not cover all aspects of the law

http://www.dol.gov/ebsa/healthreform/

- most up to date guidance

Compliance aid is continually updated as changes are made

Katherine L. Radakovich, MBA, SPHR

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Slide29

Self Compliance tool will help you determine the following:

Determine Grandfather Status and what that means for you, the employerDetermine compliance with Dependent coverage of children to Age 26Determining compliance to Rescission Provisions

A cancellation or discontinuance of coverage that has a retroactive effect; treats a policy as void from start date (do not pay premiums)

Katherine L. Radakovich, MBA, SPHR

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Slide30

Self Compliance tool will help you determine the following:

Compliance with Lifetime Limits and restrictions on annual limitsCompliance

with Pre-existing condition exclusion for individuals

Compliance

provision of supplying the Summary of Benefits and Coverage to employees and Uniform Glossary

Compliance

with the Patient Protection Provisions

Employee has the right to designate primary care provider of choice covered in the plan

Katherine L. Radakovich, MBA, SPHR

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Slide31

Self Compliance tool will help you determine the following:

Compliance in the coverage of preventive servicesPlan must provide preventive services without cost sharing

Compliance

in the

internal claims and appeals process and external review

Health insurers offering group health plans must offer effective internal claims and appeal process

Must comply with State or Federal external review process

Ensure your group health plan offers this provision

Katherine L. Radakovich, MBA, SPHR

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Slide32

Self Compliance tool will help you determine the following:Self Compliance tool provides questions to help employers review its group health plan and ensure compliance with ACA Employer provisions

Katherine L. Radakovich, MBA, SPHR

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Slide33

Cost Controlling Steps while complying with the ACA Employer Provisions

Provide Consumer (employee) engagement toolsTeach employees to be better health care consumers

Choose a plan that offers cost transparency tools for employees to make smart provider choices

Katherine L. Radakovich, MBA, SPHR

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Slide34

Cost Controlling Steps while complying with the ACA Employer Provisions

Consumer Directed PlansImplement or expand a CDPAssists in the elimination of high cost plans

Wellness Programs

Offer wellness incentives

Cannot violate the HIPAA Nondiscrimination Rules

Spousal Coverage

Eliminate or limit spousal coverage

Spousal surcharges

Katherine L. Radakovich, MBA, SPHR

34

Slide35

Cost Controlling Steps while complying with the ACA Employer Provisions

New delivery modelsEncourage employees to use high-performance networks – accountable healthcare organizations, designated centers of excellence

Specialty pharmacy benefits

Specialty drugs can make up 30% of a plans costs

Require step therapy – trying less-expensive medication to manage condition first

Katherine L. Radakovich, MBA, SPHR

35

Slide36

Sharing the cost

2015 Employee ContributionsMove to a private exchangeGives employee’s the choice of provider

Mixed views on whether it will save employers money

Large organizations will make employees responsible for at least 20% of coverage costs.

“Skinny” plans do not meet ACA affordability or minimum value test

Low value plan

Katherine L. Radakovich, MBA, SPHR

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Slide37

Do not ignore the ACA

In summary – to-dos Determine if you are in complianceSelf audit tool

Determine if you are a “large” employer

Subject to play or pay

Determine your 2015 plan design

Determine which employees will be eligible for open enrollment

Determine whether or not your organization will be subject to the “auto-enroll” requirement (pending ruling status)

Katherine L. Radakovich, MBA, SPHR

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Slide38

Summary

Use the ACA as a catalyst to strategize employee benefits for recruiting and retention purposesACA is constantly evolvingAssign an expert in your organization to monitor the ACAIts time to get ready for 2015/2016 Reporting Requirements

Katherine L. Radakovich, MBA, SPHR

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