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
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Employers and The Affordable Care Act – Why Are We Still Confused?
Presented by: Katherine L. Radakovich, MBA, SPHRChief Human Resources OfficerChartiers Center
Slide2Welcome
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
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Slide3Seminar 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
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Slide4How do you feel about compliance and the ACA?
Katherine L. Radakovich, MBA, SPHR
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Slide5PPACA
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
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Slide6Recent 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
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Slide7Understand 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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Slide8Understand 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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Slide92014-2015 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
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Slide102014-2015 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
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Slide112014-2015 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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Slide122014-2015 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
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Slide132014-2015 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
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Slide142014-2015 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
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Slide152014-2015 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
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Slide16Are 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
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Slide17Who 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
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Slide18Safe 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
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Slide19Safe 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.
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Slide20Full 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
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Slide21Qualifying 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
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Slide22Who 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
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Slide23Who 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
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Slide24Health 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
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Slide25Planning 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
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Slide26Planning 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
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Slide27Planning 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
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Slide28Self 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
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Slide29Self 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)
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Slide30Self 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
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Slide31Self 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
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Slide32Self 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
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Slide33Cost 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
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Slide34Cost 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
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Slide35Cost 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
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Slide36Sharing 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
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Slide37Do 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)
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Slide38Summary
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
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