patient protection & affordable care act (ppaca)

PATIENT PROTECTION& AFFORDABLE CARE ACT (PPACA)

Angela MooreIndiana State Library Intern

June 26, 2013

Presenter Introduction

Rising 2nd year law student

Not a lawyer

Summer legal intern at ISL

Former librarian at Berne Public Library

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Disclaimer This is legal information, not legal advice

I cannot apply the law to your specific situation

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PPACA: An Overview 900+ pages of legislation

Focus today on employer requirements Shared Responsibility for Employers Automatic Enrollment Requirement SHOP Exchange Reporting Requirements Notice Requirement

Some issues are still awaiting regulation

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Shared Responsibility for Employers PPACA § 1513; effective after Dec. 31, 2013

You’ve heard about employer penalties, right? Technically, there is no “penalty” for not providing

insurance PPACA falls under Congress’s taxing power But you may have to make a “shared responsibility

payment” No employer is “required” to provide insurance

You can still choose to not provide insurance, PPACA just shifts the cost-benefit analysis

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Shared Responsibility for Employers An Employer’s Choice

1. Provide adequate, affordable insurance, or2. Risk being liable for making payments

It’s not a penalty, but it’s still taking your money

You are not breaking the law if you choose to not provide insurance

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Shared Responsibility for Employers Not all employers have to make payments

There are three questions to ask If your library can answer any of them with “no,” then you

do not need to make a payment.

Are you a large employer? 50+ full-time equivalent employees, system-wide

Did a full-time employee receive a premium tax credit or cost-sharing reduction?

Do you have more than 30 full-time employees?

There is a difference between “full-time” and “full-time equivalent”

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Shared Responsibility for Employers Large Employer: 50 Full-Time Equivalents

FTE = # FT employees + # pro-rated PT employees Full-time = average of 30 hours per week or more In general, to pro-rate PT: add all part-time workers’

hours for the month together and divide by 120 43 IRC §4980H(c)(2)(C) (as modified by PPACA §1513(a)) e.g. 4 FT + 2 PT employees (who together worked 150

hours for the month) 150/120 = 1.25 4 + 1.25 = 5.25 FTE

IRS regulations may change this to 130 (Notice 2011-36)

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Shared Responsibility for Employers Large Employer: 50 Full-Time Equivalents

The calculations can become more complex and very specific. If you’re on the bubble, you may want to consult a lawyer.

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Shared Responsibility for Employers Two things before we move on:

1. Remember, if you are under 50 full-time equivalent employees, you will not be liable for any payments.

2. From this point on, forget about full-time equivalents. We are only looking at full-time employees now.

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Shared Responsibility for Employers Our three questions:

Are you a large employer? Did a full-time employee receive a premium

tax credit or cost-sharing reduction? Do you have more than 30 full-time

employees?

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Shared Responsibility for Employers Premium Tax Credit/Cost-sharing Reduction FT employee has to apply for and receive a PTC

or CSR for employer payments to be triggered It is ok to just offer insurance to full-time employees

If the employer does not offer insurance Generally eligible if household income is between

100% and 400% of the federal poverty level Dept. of Health and Human Services releases annually Federal poverty level = poverty guidelines Dependent on household size 2013 levels: http://aspe.hhs.gov/poverty/13poverty.cfm

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Shared Responsibility for Employers Premium Tax Credit/Cost-sharing Reduction FT employee has to apply for and receive a PTC

or CSR for employer payments to be triggered If the employer does offer insurance

Unaffordable: the plan premium is more than 9.5% of household income, or

Inadequate: policy does not cover an average of 60% of healthcare costs Minimum value calculator:

http://www.cms.gov/cciio/resources/regulations-and-guidance/index.html

IRS Safe Harbor: look at employee’s wages listed on W-2 (IRS Notice 2011-73)

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Shared Responsibility for Employers Our three questions:

Are you a large employer? Did a full-time employee receive a premium

tax credit or cost-sharing reduction? Do you have more than 30 full-time

employees?

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Shared Responsibility for Employers Calculating the Payment (for 2014)

Once a large employer’s full-time employee has received a credit/reduction

If you do not offer insurance, the monthly payment is

If you do offer insurance, the monthly payment is

OR

whichever is smaller Note: for FT employees ≤ 30, the payment is $0

)30 employees time-full of (#2000$12

1

)30 employees time-full of (#2000$12

1

)CSRor PTC getting employees FT of #(3000$12

1

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Shared Responsibility for Employers Recap:

Payments do not apply to small employers Large, but with 30 or fewer FT employees: payment =

$0 A full-time employee needs to actually receive a

credit or reduction to trigger a payment

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Shared Responsibility for Employers Determining Full-Time with IRS Safe Harbors

On-going employees: Measurement period: 3-12 months Administrative period: up to 90 days Stability period: 6-12 months (no shorter than

measurement period)

You can rely on this method, at least through cycles beginning before the end of 2014

17 IRS Notice 2012-58: http://www.irs.gov/irb/2012-41_IRB/ar07.html


On-going employees: Example of one complete cycle:

Measurement Period: May 1-October 31 (6 months) Administrative Period: November 1-December 31 (2 months) Stability Period: January 1-December 31 (12 months)

Cycle 1

Cycle 2 Cycle 3


Measurement

Admin

Stability

Measurement

Admin

Stability

Measurement

Admin

Stability


New Employees: reasonably expected to work full-time Offer at, or before, conclusion of initial 3 calendar

months



New Variable Hour and Seasonal Employees A little more complicated Initial measurement period: 3-12 months, no shorter

than one month less than initial stability period Initial administrative period: up to 90 days Initial stability period: same length as for ongoing

employees, no more than 1 month longer than IMP IMP + IAP cannot extend beyond end of calendar month

beginning on or after employee’s one-year work anniversary

Once they have worked an entire standard MP, determine full-time status along with other on-going employees



New Variable Hour and Seasonal Employees Example:

Initial Stability Per. must be as long as Standard Stability Per. 12 months

Initial Measurement Per. cannot be more than 1 month shorter than Stability Per. 11-12 months, for our example, we’ll choose 11 months

Initial Admin. Per. can be up to 90 days, but IMP + IAP cannot extend past the end of the calendar month beginning on or after the employee’s one year work anniversary 0- 2 months (plus fraction of month, depending on start date)


Measurement Admin Stability

Initial Measurement I. Adm

Initial Stability

Measurement Admin Stability

Shared Responsibility for Employers Being Assessed, Making a Payment

The IRS will contact you if you are potentially liable Will not happen until after employees’ tax returns are

due You will have opportunity to respond

If you are found liable for payment, IRS will send a notice and demand for payment Notice will include instructions

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Shared Responsibility for Employers You have a choice (are not breaking the law)

You may be exempt from payments

Only full-time (30 or more hours/week) employees trigger payments

Full-time can be calculated with cycles

The IRS will contact you about payments if you need to make them

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Automatic Enrollment Requirement PPACA § 1511 For employers with 200 or more full-time

employees If employer offers insurance coverage, new

full-time employees must automatically be enrolled in the coverage Employees may opt out of coverage

Still awaiting regulations from Dept. of Labor, intended completion before 2014

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SHOP Exchange Small business Health Options Program Beginning in 2014, eligible small businesses will

be able to purchase insurance through the SHOP No obligation to purchase through exchange

Side-by-side policy comparisons Premiums cannot be set by employees’ health or

medical history Businesses with up to 100 employees are eligible,

although until 2016 states may further limit eligibility to only businesses with up to 50 employees.

Look for more information in October 2013 Coverage begins January 2014

http://www.healthcare.gov/news/factsheets/2011/07/exchanges07112011g.html

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Reporting Requirements PPACA § 9002: W-2s

Cost of employer-sponsored insurance Still awaiting IRS guidance, meanwhile, see

http://www.irs.gov/uac/Form-W-2-Reporting-of-Employer-Sponsored-Health-Coverage

PPACA § 1514: large or insuring employers First reports will be due in 2015 (for 2014 info) To IRS

Basic information regarding whether insurance was provided.

To Employees Full-time employees whose info was reported to the gov’t

Still waiting for IRS regulations, reporting might be coordinated with other required reports

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Notice Requirement: PPACA § 1512 Applies to all employers (regardless of size) To be given at time of hiring (plus initial

distribution to current employees) Model language if you offer insurance:

http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf Model language if you do not offer insurance:

http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf

Originally effective March 31, 2013, delayed until October 1, 2013

27 DOL Technical Release No. 2013-02: http://www.dol.gov/ebsa/newsroom/tr13-02.html

PPACA In Review Shared Responsibility for Employers

Large Employers Automatic Enrollment

Very Large Employers SHOP Exchange

Small Employers Reporting Requirements

Large or Insuring Employers Notice Requirement

All Employers

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Resources Dept. of Labor – Employee Benefits Security

Administration www.dol.gov/ebsa/healthreform

Dept. of Health and Human Services www.healthcare.gov Includes full text of the PPACA

IRS www.irs.gov/aca

UCLA Law School Library libguides.law.ucla.edu/ppaca

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QuestionsFor questions about this presentation, contact: Angela Moore: [email protected]

At ISL until July 31st, 2013

For questions about how PPACA specifically affects your library, contact your library’s attorney.

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patient protection & affordable care act (ppaca)

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fulltime equivalent

fulltime equivalentsfte

fulltime employeesif

employerslarge employer

employer payments

employer penalties

ft employees

affordable insurance