Affordable Care Act

Campus Meeting

February, 2015

Presented By:Terri Phillips – UM

Missoula

FOUR WAYS TO THINK ABOUT EMPLOYEES:

1. Continuing (on-going) employees.

2. New employees (never worked for MUS system before) - will they have set hours? Are they variable hour employees? Adjuncts? Classified staff? Temporary hires?

3. Employees with a change in employment status – for instance, FTE reduction

4. Rehires and other break in service situations

BASIC DEFINITIONS:

ACA – Affordable Care Act

SPD – MUS Summary Plan Document for state insurance coverage

Initial Measurement Period (IMP)–• MUS First Initial Measurement Period – Dec 1, 2014 to May 31, 2015.• Initial Measurement Period for anyone hired after November 30, 2014 is a 12 month

period beginning on the first day of the month following their date of employment.

Administrative Period (AP) – • The month of June is the administrative period connected to any MUS Standard

Measurement Period and connected to the MUS First Initial Measurement Period.• The first month after the completion of any 12 month Initial Measurement Period for

anyone hired after November 30, 2014.

Stability Period (SP) – 12 month period of time that an employee has insurance coverage based on the requirements of the ACA as long as actively employed.

Standard Measurement Period (SMP) – 12 month period of time that runs from June 1 to May 31 forever.

BASIC INFORMATION:

• Follow the rules of the Summary Plan Document (SPD) for our health insurance plan. If an employee is hired at a .5 FTE for 6 months or more, then that person will be eligible for coverage from the first date of hire.

• ACA requires that an employee work a minimum of 30 hours/week on average or an average of 130 hours/month.

• A break in service under the ACA (for higher education) means the employee has had no work hours for 26 weeks. If that is true then the person is a new hire when you bring them back to work.

• As an educational institution, the regular breaks that occur during an academic year do NOT count against the employee. For instance, the four weeks of winter break do not count as a break in service under the ACA if the employee worked before the break and comes back to work immediately after the break – that is continuous employment under the ACA. Summer breaks alone are not 26 weeks long so do not count against the employee for ACA calculations.

BASIC INFORMATION (Continued):

• If an employee meets the requirements under ACA, then they must receive an offer of coverage. This is the purpose of the administrative period.

• Adjunct faculty will have their weekly hours calculated by multiplying the number of credits they are teaching by 3. (ex. 6 credits taught = 18 hours of work)

• Any hours worked in a work study position, federal or state, for which the student is being paid out of federal or state work study funds do NOT count toward the accumulation of hours for determining eligibility under the ACA.

• ****If a student becomes eligible for insurance based on hours worked in a student position, then they must be converted to a staff temporary hire position if accepting insurance and remaining employed. They cannot be on the MUS insurance while in a student position. Very Important Note: A student’s financial aid package could be impacted by a move from student to a temp position.***

• Employees will most likely fall into more than one measurement period during the time they are employed. It will be important to keep these measurement periods in mind when working through the various situations that come up.

Jack is hired on October 10, 2014 as classified staff in variable hour position.

•Initial measurement period begins December 1, 2014 and ends on May 31, 2015 (first initial measurement period – everyone employed as of November 30, 2014 will be measured in this period).

•He averages 135 hours each month.

•He will qualify for an offer of coverage (coverage beginning July 1, 2015).

•June 2015 is his Administrative month.

•His first stability period begins July 1, 2015 and ends June 30, 2016 (12 month Stability Period) – he will have coverage for the 12 months.

•Jack will enter the MUS Standard Measurement period on June 1, 2015 lasting through May 31, 2016 with June 2016 as the Administrative Period.

Oct-14 Jack hired Oct-15 SP SMP

Nov-14 Nov-15 SP SMP

Dec-14 Begin IMP Dec-15 SP SMP

Jan-15 IMP Jan-16 SP SMP

Feb-15 IMP Feb-16 SP SMP

Mar-15 IMP Mar-16 SP SMP

Apr-15 IMP Apr-16 SP SMP

May-15 IMP May-16 SP SMP

Jun-15 Admin Period SMP Jun-16 SP AP

Jul-15 Stability Period SMP Jul-16

Aug-15 SP SMP Aug-16

Sep-15 SP SMP Sep-16

IMP - initial measurement period

SP - Stability period

SMP - standard measurement period

AP - administrative period

Sam is hired on August 22, 2014; IMP begins Dec 1, 2014; ends on May 31, 2015.•He averages 131 hours each month as classified staff in variable hour position.•He will qualify for an offer of coverage beginning July 1, 2015.•His first stability period begins July 1, 2015; ends June 30, 2016 – he will have coverage for the 12 months if actively employed even if only for one hour per month.•Sam will enter the MUS Standard Measurement period on June 1, 2015 lasting through May 31, 2016 with June 2016 as the Administrative Period. • Sam works July, Aug, and one day in Sept – his coverage will end on Sept 30, 2015.• Sam returns to work Jan 19, 2016; his coverage will begin again immediately – he is still in his 12 month stability period. This is not a qualifying event. No changes can be made.• Sam does not work an average of 30 hours per week during the SMP so his insurance ends on June 30, 2016. Not eligible under SPD either.

Hours Hours

Dec-14 Begin IMP 131 Jan-16 SP 40 SMP

Jan-15 IMP 131 Feb-16 SP 150 SMP

Feb-15 IMP 131 Mar-16 SP 150 SMP

Mar-15 IMP 131 Apr-16 SP 150 SMP

Apr-15 IMP 131 May-16 SP 80 SMP

May-15 IMP 131 Jun-16 SP 0 AP

Jun-15 Admin Period yes SMP

Jul-15 Stability Period 120 SMP

Aug-15 SP 120 SMP

Sep-15 SP 8 SMP

Oct-15 SP 0 SMP

Nov-15 SP 0 SMP

Dec-15 SP 0 SMP

REMEMBER:• We cannot retro-actively cancel someone’s health insurance.• HRS must be notified in a timely manner when someone is terminated so the

insurance can be terminated also. (For instance, academic year employees that we cover for the summer months because they are coming back in the fall).

• When someone who is within their stability period is re-hired, and is eligible for coverage, they are covered from the date of rehire. This is not a qualifying event and employees cannot make changes to their coverage choices.

• When an employee is hired after November 30, 2014, they will enter an initial measurement period that will run for 12 months. The IMP will begin on the first day of the month AFTER they are employed. Their 13th month of employment will be the administrative period. If they are found eligible for an offer of coverage and they accept coverage then their insurance will begin on the first of the month following their administrative period (so their 14th month of employment).

• If an employee is counted through a standard measurement period, then they are transitioned to that counting period on an on-going basis and become a continuing employee. That status would only change if they had a break in service. In the following example, “Emily” becomes a continuing employee with coverage.

Emily is a new hire in January 2015 in a variable hourly classified staff job.• Her initial measurement period

begins Feb 1, 2015.• She completes the IMP, is evaluated

in February, 2016 and is found eligible for an offer of coverage. She accepts the coverage.

• Emily’s first stability period (coverage period) is March 1, 2016 through Feb 28, 2017.

• Emily will also fall into the MUS Standard Measurement Period running from June 1, 2015 through May 31, 2016.

• During the SMP she averages more than 30 hours per week so is eligible for continuing insurance through June 30, 2017.

• Beginning July 2017 her work hours drop and become very variable. However, she is in a stability period so will continue to be covered for health insurance as long as she works even one hour during the month.

Hours Hours

Jan-15 Emily hired 80 Feb-16 AP 160 SMP

Feb-15 begin IMP 160 Mar-16 SP 160 SMP

Mar-15 IMP 160 Apr-16 SP 160 SMP

Apr-15 IMP 160 May-16 SP 160 SMP

May-15 IMP 120 Jun-16 SP 160 AP

Jun-15 IMP 110 SMP Jul-16 SP 5 SMP

Jul-15 IMP 160 SMP Aug-16 SP 5 SMP

Aug-15 IMP 120 SMP Sep-16 SP 5 SMP

Sep-15 IMP 80 SMP Oct-16 SP 80 SMP

Oct-15 IMP 160 SMP Nov-16 SP 10 SMP

Nov-15 IMP 160 SMP Dec-16 SP 10 SMP

Dec-15 IMP 160 SMP Jan-17 SP 5 SMP

Jan-16 IMP 80 SMP Feb-17 SP 10 SMP

Initial Measurement period gives insurance through February 2017

Standard Measurement period gives insurance through June 2017

NOTE: • If it happens that an employee who is currently covered for health insurance has a job

status change (for instance, reduction in FTE) which would, in the past, have caused their health insurance coverage to end, then we must first consider their status under ACA.

• For instance, an employee who has been covered for health insurance based on their .75 FTE for several years is now dropping to a .45 FTE.

• In the past, their health insurance coverage would have ended based on this permanent FTE change.

• Now, with consideration to the ACA, we will have to analyze the fact that they have a 12 month stability period which is based on the most recent standard measurement period they have completed. Health insurance coverage cannot be terminated until that stability period has ended (and you have completed the analysis of their average hours worked during the current standard measurement period).

• For instance, the FTE is reduced to .45 FTE in April 2017. This employee has completed the SMP from June 2015 to May 2016 and averaged out at 30 hours per week. They are in a SP running from July 1, 2016 to June 30, 2017. Coverage would have to continue to June 30, 2017 at a minimum for any month there are work hours. You would also have to evaluate how many hours they worked from June 1, 2016 to May 31, 2017. They could be eligible for another stability period through June 30, 2018.

If the same employee drops from .75 FTE to .5 FTE in the above scenario, there would be no changes to the employee’s insurance coverage since the employee is still working 20 hours per week (.5 FTE) per state statute/SPD.

Standard Measurement PeriodHours Weeks

Jun-15 120 4Jul-15 150 5

Aug-15 120 4Sep-15 150 5Oct-15 120 4

Nov-15 120 4Dec-15 150 5Jan-16 120 4Feb-16 120 4Mar-16 150 5Apr-16 120 4

May-16 120 41560 52

Average hours 30

Standard Measurement PeriodHours Weeks

Jun-16 120 4Jul-16 150 5

Aug-16 120 4Sep-16 150 5Oct-16 120 4

Nov-16 120 4Dec-16 150 5Jan-17 120 4Feb-17 120 4Mar-17 150 5Apr-17 72 4

May-17 72 41464 52

Average hours 28.15385

Insurance would run through the end of June, 2017, and then terminate due to average hours worked dropping to 28.15 / week and FTE reduced below .5.

This SMP provides coverage for the SP from July 1, 2016 to June 30, 2017.

This SMP would apply to the SP that runsfrom July 1, 2017 to June 30, 2018.

Jamie was hired into an AY variable hour temporary staff position on January 20, 2015.• She begins her IMP February 1, 2015 which concludes January 31, 2016.• She is not offered insurance under the SPD since she will not work 6 months. Her

termination date is May 22, 2015.• Jamie is rehired for fall semester beginning August 20, 2015. This is not a 26 week

break in service so not a new hire; she is back in her IMP begun in February 2015.• Her fall termination date is December 18, 2015.• She is hired again for the spring semester and begins January 19, 2016. Winter

break is not a break in service so she will complete her IMP on January 31, 2016.• During her administrative month of February 2016, she is found to have an average

of 32.7 hours / week. Hours must be averaged over the actual week worked. An offer of coverage is made and accepted.

• She will have insurance coverage beginning March 1, 2016 ending Feb 28, 2017 for every month she is actively employed.

• She also entered the standard measurement period on June 1, 2015 through May 31, 2016 and is found to have averaged 31.4 hours / week.

• Based on the calculation from the standard measurement period, she will be eligible for coverage for every month she is actively employed through June 30, 2017.

• See graphs on following slide.

20-Jan-15 HiredIMP Feb-15 120IMP Mar-15 120IMP Apr-15 160IMP May-15 100IMP Jun-15 0 SMP Jun-15 0IMP Jul-15 0 SMP Jul-15 0IMP Aug-15 64 SMP Aug-15 64IMP Sep-15 200 SMP Sep-15 200IMP Oct-15 160 SMP Oct-15 160IMP Nov-15 160 SMP Nov-15 160IMP Dec-15 70 SMP Dec-15 70IMP Jan-16 55 SMP Jan-16 55

Total hours worked 1209 SMP Feb-16 100 AP Feb-16# weeks 37 SMP Mar-16 100 SP Mar-16

Average hours = 32.67568 SMP Apr-16 120 SP Apr-16SMP May-16 100 SP May-16

Total hours worked 1129 SP Jun-16 AP Jun-16# weeks 36 SP Jul-16 SP Jul-16

Average hours = 31.36111 SP Aug-16 SP Aug-16SP Sep-16 SP Sep-16SP Oct-16 SP Oct-16SP Nov-16 SP Nov-16SP Dec-16 SP Dec-16SP Jan-17 SP Jan-17SP Feb-17 SP Feb-17

SP Mar-17SP Apr-17SP May-17SP Jun-17

This initial measurement period applies to thisstability period

This standard measurement periodapplies to this stability period

Fred began employment as an Adjunct Faculty member on August 25, 2014.

• He is teaching 9 credits for the fall (equaling 27 hours per week).

• Fred’s IMP begins December 1, 2014 and runs to May 31, 2015.

• Spring semester he is teaching 6 credits (equaling 18 hours per week).

• At the end of his first IMP, he will not receive an offer of coverage because he averaged only 19 hours per week.

• He will not be eligible for coverage under the SPD because he has not met a .5 FTE for 6 consecutive months or more.

Week Hours5-Dec 27

12-Dec 2719-Dec 2726-Dec 0

2-Jan 09-Jan 0

16-Jan 023-Jan 030-Jan 186-Feb 18

13-Feb 1820-Feb 1827-Feb 186-Mar 18

13-Mar 1820-Mar 1827-Mar 18

3-Apr 1810-Apr 1817-Apr 1824-Apr 181-May 188-May 18

15-May 18Total Hours 369# Weeks 19Average Hours 19.42105

Ann began employment as an Adjunct Faculty member on August 25, 2014.• She is teaching 6 credits for the fall (equaling 18 hours per week) and tutors under a second position for 13 hours perweek (.325 FTE). She is contracted for the same schedule for spring.• Ann’s IMP begins December 1, 2014 and runs to May 31, 2015.• She will qualify for an offer of coverage at the end of theIMP with average hours of 31 per week.• Ann would have coverage for any month of activeemployment from July 1, 2015 to June 30, 2016.• Consider, though, that Ann would have been eligible underthe SPD for coverage beginning fall semester since 6 creditswould equate to a minimum of a .3 FTE plus thetutoring at .325 FTE would give her .625 FTE for greaterthan 6 months.• Our current rules for the offer of insurance coverage are

still in effect – don’t let thoughts of the ACA cause you to forget that the SPD is the first rule to follow.

Week Hours5-Dec 31

12-Dec 3119-Dec 3126-Dec 0

2-Jan 09-Jan 0

16-Jan 023-Jan 030-Jan 316-Feb 31

13-Feb 3120-Feb 3127-Feb 316-Mar 31

13-Mar 3120-Mar 3127-Mar 31

3-Apr 3110-Apr 3117-Apr 3124-Apr 311-May 318-May 31

15-May 31Total Hours 589# Weeks 19Average Hours 31

Ann began employment as an Adjunct Faculty member on August 25, 2014 with only a one semester contract.• She is teaching 6 credits for the fall (equaling 18 hours per week) and tutors under a second position for 13 hours perWeek (.325 FTE). A total .725 FTE.• Ann’s IMP begins December 1, 2014 and runs to May 31, 2015.• Spring semester she is teaching the exact same scheduleas the fall. She is eligible for health insurance cover under the current SPD for MUS insurance and is covered beginning springsemester.• She will also qualify for coverage under the ACA at the end of the IMP with average hours of 31 per week.• Ann would have coverage for any month of activeEmployment from July 1, 2015 to June 30, 2016 even if only working one hour.• Ann does not come back to the same schedule fallsemester 2015. She teaches 3 credits (9 hours of work) with noadditional position.• She would have coverage in fall semester since she is within her stability period.• She has no contract for spring semester and a term form is submitted.• Her insurance coverage will terminate on December 31, 2015.• Her final day of work is December 19, 2015.

Ann’s coverage is based on the hours worked

during her IMP which gives her coverage for a

stability period of July 1, 2015 to June 30, 2016.

During the next SMP she does not have enough

hours to qualify.

Ann continues her life with the MUS system, same scenario as previous with a RETURN TO WORK:• She taught 6 credits for fall 2014 (equaling 18 hours per week) and tutors under a

second position for 13 hours per week (.325 FTE for second position/total of .725 FTE).

• Ann’s IMP begins December 1, 2014 and runs to May 31, 2015.• Spring semester she teaches the exact same schedule as the fall. Coverage under SPD

given.• She also qualifies under the ACA with 31 hours per week.• Ann is eligible for coverage under ACA for any month of active employment from July

1, 2015 to June 30, 2016.• Ann works a minimal amount during fall semester 2015and terminates December 15, 2015. Her insuranceterminates December 31, 2015.• She does not work spring semester 2016.• Ann returns to employment fall semester 2016.• This is a 26 week break in service from December 2015to August 2016.• Ann will be treated as a new employee and be run throughan initial measurement period from September 1, 2016 toAugust 31, 2017 unless she has a contract that makes her eligible under The SPD.

Hannah begins employment as an Adjunct Faculty member on August 25, 2014.• She is teaching 9 credits for the fall (equaling 27 hours per week) (.6 FTE).• Hannah’s IMP begins December 1, 2014 and runs to May 31, 2015.• Spring semester she is teaching 12 credits (equaling 36hours per week) 2nd contract = health insurance under SPD.• She will qualify under ACA at the end of theIMP with average hours of 34.6 per week.• Hannah would have coverage for any month of activeemployment from July 1, 2015 to June 30, 2016.• Hannah works 5 hours each week tutoring fall semester. Thisis during her stability period so she will have insurancecoverage. She is not scheduled to work spring semester so her coverage terminates Dec 30, 2015 – last work day is 12/15/15.• Hannah returns to work on March 3, 2016, once againproviding tutoring services.• Her insurance coverage will begin again immediately since sheis still within her stability period which runs through June 30, 2016.• This is NOT a qualifying event so she can make NO changes toher Choices elections.

Week Hours5-Dec 27

12-Dec 2719-Dec 2726-Dec 0

2-Jan 09-Jan 0

16-Jan 023-Jan 030-Jan 366-Feb 36

13-Feb 3620-Feb 3627-Feb 366-Mar 36

13-Mar 3620-Mar 3627-Mar 36

3-Apr 3610-Apr 3617-Apr 3624-Apr 361-May 368-May 36

15-May 36Total Hours 657# Weeks 19Average Hours 34.57894737

Peter begins working Sept 25, 2015 as an hourly employee, variable schedule.• He terminates employment on October 9, 2015.• He begins working again on December 14, 2015 and continues working long into2016.• Peter is employed for only 3 weeks initially and then terminates. He is gone for 9 weeks and is rehired. The 3 week initial work period is out weighed by the 9 weeks gone.He will begin work on December 15, 2015 as a new hire.• His initial measurement period will begin January 1, 2016 and run through December31, 2016. (see next slide)

The IRS provides an employment break rule for higher education:

1. An individual should be treated as a continuing employee (not a new hire) unless that person had no hours of service for 26 weeks or more.

2. If a staff member did not work for at least four consecutive weeks and that period is longer than the time the person worked immediately before the break, the employee can

be treated as a new hire.

Begin End21-Sep-15 25-Sep-15 Begins employment on 21-Sep-1528-Sep-15 2-Oct-15

5-Oct-15 9-Oct-15 Terminates employment on 9-Oct-1512-Oct-15 16-Oct-1519-Oct-15 23-Oct-1526-Oct-15 30-Oct-152-Nov-15 6-Nov-159-Nov-15 13-Nov-15

16-Nov-15 20-Nov-1523-Nov-15 27-Nov-1530-Nov-15 4-Dec-15

7-Dec-15 11-Dec-1514-Dec-15 18-Dec-15 Rehired on 14-Dec-15 for indefinite period

Work WeekSchedule

No credited workhours during thistime.

Peter’s employment scenario (from previous slide)

Graph to left is for the process of making a decisionabout when the employee begins their InitialMeasurement Period. If there are fewer weeks worked than the consecutive weeks of not being employed, then the person is a new hire when theyreturn to employment.

Remember – if a person has already served an Initial Measurement Period and been foundeligible for coverage, then their coverage is in forcefor any time period for which they are actively employed.

If the person was and was then newly hired and had terminated with a they would be

weeks worked of: total break of: treated as a:1 4 New hire2 4 New hire3 4 New hire4 5 New hire5 6 New hire6 7 New hire

Below weeks worked exceed weeks of break time:6 5 Returning employee7 6 Returning employee8 4 Returning employee9 5 Returning employee10 4 Returning employee

Nancy is hired through a competitive search process as a full time 1.0 FTE MUS Contract position on October 22, 2015.• Nancy’s insurance will be effective on October 22, 2015 per our SPD and state statute.• She begins her initial measurement period on November 1, 2015 running throughOctober 31, 2016. • At the end of her IMP she averaged 40 hours per week and she will continue herinsurance coverage through her stability period of December 1, 2016 through November 30, 2017.• She will also fall into the MUS SMP which runs from June 1 through May 31 each cycle.

Remember – a large percentage of our employees have coverage.We need to keep track of hours for the measurement periods for all

in order to make sure that we meet the requirements of the ACA “pay or play” provisions. So, a new process, but one that is necessary

to protect the resources of our plan.

Kim has been employed since 2001 in a position with on-going insurance.• She is measured in the first IMP of December 1, 2014 through May 31, 2015.• In the administrative month, June 2015, she is still eligible for insurance and will bein the stability period from July 1, 2015 to June 30, 2016.• Kim resigns her position with the University on August 15, 2015 and her coverage endson August 31, 2015 per SPD and state statute.• However, Kim decides to return to the University on January 5, 2016 to work a temporary position for 5 hours per week.• She is still within her stability period which ends June 30, 2016 and is covered byinsurance during any month that she is actively employed.• She will immediately be covered by insurance again beginning January 5, 2016.• This is NOT a qualifying event so she cannot make any changes to her Choices insurance.

2014 2015 2015 2015 2015 2015 2015 2015 2015 2015Dec Jan Feb Mar Apr May Jun Jul Aug Sept

173.33 173.33 173.33 173.33 173.33 173.33 AP

173.33 85 0

173.33 173.33 80 0

2015 2015 2015 2016 2016 2016 2016 2016 2016 2016Oct Nov Dec Jan Feb Mar Apr May June July

0 0 0 10 20 20 20 20 20 20

0 0 0 10 20 20 20 20 AP

Kim has coverage through June 2016 for any month during which she is actively employed.

During the Administrative month of June 2016 it is found that she is not longer eligible.

How can I check my employees hours? There are three different reports available inInfo Griz to give you exact information on your employees hours. You can check them at any time.

Information in regard to health insurance will be reported to employees with a new form in January 2016. This form, much like a W2, will be issued to every employeeto address the requirements of the ACA. Form may look much like the sample below.