Implications of the Affordable Care Act for Employers
Bob Kocher, M.D.
A P R E S E N T A T I O N B Y
Why Am I (Bob) Here?S E C T I O N 1
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Healthcare Consulting
Doctor at Harvard
Healthcare Reform
F R O M
Partner at Venrock
T O
T O
T O
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T H E P R O B L E M
spent on healthcare and nobody is happy with the
results
$3.1 trillion
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T H E S O LU T I O N
The Affordable Care ActKey provisions are intended to extend coverage to millions of uninsured Americans, to implement measures that will lower health care costs and improve system efficiency, and to eliminate industry practices that include cancellation and denial of coverage due to pre-existing conditions.
Key ACA Takeaways for Employers
S E C T I O N 2
Goals of the ACAR E D U C E C O S T S
E X PA N D C O V E RA G E I N C R E A S E Q U A L I T Y
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G OA L 1 : R E D U C E H E A LT H C A R E C O S T S
Commercial healthcare premiums lowest in 50 years
Last 5 years of healthcare costs = slowest growth ever (in the history of Medicare)
A C C O M P L I S H M E N T S
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G OA L 2 : E X PA N D I N S U RA N C E C OV E RAG E
America has the lowest rate of uninsured in all time
Waiting times for patients have NOT changed at all
A C C O M P L I S H M E N T S
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G OA L 3 : I N C R E A S E Q U A L I T Y C A R E
700,000 less patients readmitted to hospitals within 30 days
17% drop in hospital-acquired infections since 2010
A C C O M P L I S H M E N T S
The ACA and YouT H E W H O , W H AT , W H E N , A N D W H Y ?
WHOT H E
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T H E W H O
Companies with 100+ full-time employees
Companies with 50-99 full-time employees(but you may qualify for transition relief)
The ACA considers you an Applicable Large Employer (ALE) if your company has 50+ full-time employees and full-time equivalent employees (FT/FTE). Compliance with the ACA employer mandate in 2015 is based on the size of your company in 2014. Affiliated employers may be treated as one employer in determining ALE status.
WHO needs to comply with the ACA?
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T H E W H O
Calculating your full-time employees
40 Full Time Employees (30 hours/wk)
+20 Part-Time Employees (15
hours/wk)50 FTEs
Note: Rules are even more complicated for seasonal workers.
E X A M P L E
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T H E W H O
Limited Workforce Size. An employer must employ on average between 50-99 FT employees (including FTEs) on business days during 2014.
Maintenance of Workforce and Aggregate Hours of Service. From February 9th, 2014 to December 31st, 2014, an employer may not reduce the size of its workforce or its employees’ hours of service purely to qualify for the transition relief.
Maintenance of Previously Offered Health Coverage. An employer must maintain—and not materially reduce—the health coverage offered as of February 9th, 2014, until the last day of the 2015 plan year.
Qualifying for Transition Relief
T H E
WHAT
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T H E W H AT
WHAT is Employer Shared Responsibility?
To be compliant, the ACA requires businesses to offer affordable insurance that provides
minimum value:Affordable Insurance: < 9.5% of an employee’s annual household income
Minimum Value: 60% of the total cost of an employee’s medical expenses
Minimum Essential Coverage: the minimum essential health benefits that plans are required to coverAnd to track and report employee data
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T H E W H AT
Using the 3 Safe Harbors
Is your health insurance affordable? Make sure your lowest cost, self-only employee plan does not
exceed 9.5% of:
Employee’s W2 Wages
S A F E H A R B O R # 1 S A F E H A R B O R # 2
Employee’s Hourly Pay Rate
S A F E H A R B O R # 3
The Federal Poverty Level for
an Individual
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T H E W H AT
Tracking Employee Data
HR Payroll Benefits Time & Attendance
Date of birth Hours work and paidProof of offering health insurance
Leave of Absence dates
Date of hire/termination Hourly rate of payMinimum value documentation
State-mandated leaves
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T H E W H AT
Form 1094-CEmployer TransmittalAccounts for each of the following, per 2015 calendar month:
Full-time employees
Total headcount
Whether Minimum Essential Coverage was offered
Whether an applicable 4980H “Safe Harbor” was used
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T H E W H AT
Form 1095-CEmployee StatementAccounts for each of the following, per 2015 calendar month:
Proof of offer of coverage (with code)
Employee’s share of the lowest cost monthly premium
Whether an applicable 4980H “Safe Harbor” was used
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T H E W H AT
Written Statement to Each Covered Employee
The employer’s name, address, and contact information
The information for the employee on the return being filed
T H E
WHEN
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T H E W H E N
WHEN do you need to file the forms?
February 29, 2016
P A P E R D E A D L I N E
March 31, 2016
D I G I T A L D E A D L I N E
Form 1094-C & Form 1095-C
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T H E W H E N
WHEN do you need to file the statement?
A written statement for each covered employee
January 31, 2016
D E A D L I N E
T H E
WHY
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T H E W H Y
The penalties are already in effect for the 2015 plan year for companies with 100+ FT/FTE. For companies with 50-99 employees, penalties are effective for the plan year beginning on January
1st, 2016.
WHY comply with the ACA?
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T H E W H Y
Avoid Penalties
Do This… …or Pay This Penalty
Offer your employees health coverage$2,000 for every FT employee at your company(less the first 30)
Offer affordable health coverage (an employee’s contribution doesn’t exceed 9.5% of their household income) that provides minimum value (the plan covers, on average, 60% of an employee’s medical expenses)
$3,000 for every FT employee at your company(less the first 30)
File forms 1094-C and 1095-C $200 for each delinquent or incorrect return
Provide written information statements to each of your employees
$200 for each missing statement
The Future of HRS E C T I O N 3
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T H E F U T U R E O F H E A LT H C A R E
All other sectors have benefited from information technology and data liberation. There will be MORE
changes in the next decade.
It’s healthcare’s turn.
M O R E
ReliableM O R E
AffordableM O R E
TechnologyM O R E
Rewarding
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T H E F U T U R E O F H R
The new human resources is connected and integrated. No more separate, siloed systems.
BenefitsPayrollHR Time & Attendance
Your all-in-one ACA coverage and compliance solution
Q&A
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T H E H O W
Companies who show “good faith efforts to comply with the ACA reporting requirements” are eligible for short-term relief
from penalties.
HOW to show good faith
Document your offers of health coverage
Track your employees’ time and attendance
Keep accurate payroll and pay rate records
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T H E H O W
HOW Zenefits can help you prove good
faith
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T H E H O W
We cover your employees with choices of carriers and affordable plans.
We provide each employee with documented proof of coverage offered.
Document health coverageZ E N E F I T S H E L P S
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T H E H O W
We automatically offer employees health coverage when they surpass the ACA threshold.
We automatically un-enroll employees (and administer COBRA) when they drop below the threshold.
We alert you to compliance risks before they become penalties.
Track time & attendanceZ E N E F I T S H E L P S
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T H E H O W
We track your employees’ paid and unpaid hours and leaves of absences.
We generate your 1094-C and 1095-C forms and eliminate manual errors.
Keep accurate payroll & pay rate records
Z E N E F I T S H E L P S
Cheers!P L E A S E J O I N U S O N T H E T E R R A C E F O R D R I N K S +
S N A C K S