Obamacare: What You Don't Know Can Hurt You
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Transcript of Obamacare: What You Don't Know Can Hurt You
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OBAMACARE: What You Don’t Know CAN Hurt You
Harding & Shultz(402) 434-3000
H & S School [email protected]@KarenHaase
[email protected]@btruhe
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Policy Behind the ACA
It is important to keep in mind that the ACA’s policy purpose is to insure more peopleWhen you think about insuring as
many people as possible, the shared responsibility tax payments and requirements make more sense
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General Structure of ACA
Large Employers must either• Make affordable, qualifying coverage
available to all full time employees• Pay a “shared responsibility tax” to
supplement the cost of those employees obtaining insurance on the exchange
Small employers affected too
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Are You a Large
Employer?
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“Large Employer” Large Employer = 50 FT + FTE / yr.
• FT: EEs > 30 hours per week avg. / mo.• FTE: EEs < 30 hours per week avg. / mo.
Computing FTE• Add all monthly FTE “hours of service”
and divide by 120• “Hour of service” means paid or entitled
to payment (vacation, holiday)
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Dealing with Part-Time Staff Three Options for Salaried Staff
• Track hours• Daily equivalent if one hour worked• Weekly equivalent if one hour worked
Also the rule for calculating eligibility for employer or exchange insurance
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FTE Computation Ex.Moles School District
• 4 paras work 25 hours (25)• 3 cooks work 27 hours (81)• 6 bus drivers work 15 hours (90)
100 + 81 + 90 = 271 weekly FTE hrs. 271 x 4 = 1096 monthly FTE hrs. 1096 / 120 = 9.13 FTE for month
• Keep decimal point
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FT Computation Ex.Moles School District (Para Sara)
• Week 1: 33 hours• Week 2: 28 hours• Week 3: 31 hours• Week 4: 29 hours
33 + 28 + 31 + 29 = 121 121 / 4 = 30.25 NOTE: different for individuals
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Are you covered?An employer’s status as an applicable large employer for a calendar year is determined by taking the sum of the total number of full-time employees…for each calendar month in the preceding calendar year and the total number of FTEs…for each calendar month in the preceding calendar year, and dividing by 12.
- 26 CFR §54.4980H-2 (proposed reg)
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Counting to 50
MONTHLY computation Each month will
have “x” FT and “y” FTE Add up the 12 x’s
and 12 y’s then divide by 12
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Large Employer Ex.Moles School Dist.Sep: 42, 9.3Oct: 42, 8.7Nov: 42, 7.8Dec: 42, 7.5Jan: 42, 9.2Feb: 42, 9.9
Mar: 42, 8.6Apr: 42, 8.7May: 42, 8.7Jun: 42, 8.7Jul: 42, 8.7Aug: 42, 8.7
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Large Employer Ex. 42+42+42+42+42+42+42+42+42+42
+42+42 = 504 FT 9.3+8.7+7.8+7.5+9.2+9.9+8.6+8.7
+8.7+8.7+8.7+8.7 = 104.5 FTE 504 + 104.5 = 608.5 608.5 / 12 = 50.71 Round down: 50 EEs
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Let’s Practice!
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Shared Responsibility Tax Shared Responsibility “TAX,”
• Board stigmas if called “penalty” 2 Types of Tax
• Offering NO insurance• Offering UNAFFORDABLE or no
MINIMUM ESSENTIAL COVERAGE (MEC) insurance
Assume EHA plans meet MEC
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Premium Credit In play for BOTH Tax
AssessmentsQualifications:
• AGI less than 400% of poverty
• No Medicaid or CHIP• Non-complying
employer plan
Persons in family/HH
Poverty guideline
For families/households with more than 8 persons, add $4,020 for each additional
person.
FOR 2013
1 $11,490
2 15,510
3 19,530
4 23,550
5 27,570
6 31,590
7 35,610
8 39,630
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Premium Credit
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Offering NO InsuranceWhat we don’t know: subgroups?What we know:
• Takes one FT EE to obtain premium credit AND insurance on exchange
• 95% safe haven: if you offer insurance to all but lesser of 5 or 5% of FT EEs
• Tax is (FT – 30) x $2,000• Ex.: 75 FT – 30 = 45 x $2,000 = $90,000
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Unaffordable InsuranceWhat we know:
• Must “offer” insurance to at least 95% of FT EEs
• EE can’t pay more than 9.5% of AGI• W2 safe harbor• Tax is $3,000 x each EE who gets
insurance on exchange plus a premium credit, unless that is more than the “NO insurance” tax
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If District Pays Tax No shaming
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If District Pays Tax No shaming
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To Avoid TaxMust “offer” insurance to at least 95%
of FT EEs EE can’t pay more than 9.5% of AGIW2 safe harbor
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If District Pays Tax Tax is $3,000 x each EE who gets
insurance on exchange plus a premium credit, unless that is more than the “NO insurance” tax Employee doesn’t get this money
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Unaffordable Ins. Ex.Moles School District
• 40 Certificated• 35 Classified • We “offer” insurance to all FT EEs
20 classified staff go to exchange and obtain the credit• 20 x $3000 = $60,000 (assessed monthly)
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Effects of EHAWhat we know:
• EHA Board looking at cheaper options• Will be bronze level (60% of medical
costs covered, minimum)• Can create 2+ subgroups• 5% premium savings assessed in each
subgroup—saves for teachers• Can offer different plans to different
subgroups
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13-14 EHA Rates
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Counting to 30The term full-time employee means, with respect to a calendar month, an employee who is employed at least 30 hours of service per week, or 130 hours of service in a calendar month.
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Counting to 30 Three Options for Salaried Staff
• Track hours• Daily equivalent if one hour worked• Weekly equivalent if one hour worked
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Counting to 30 Standard Measurement Period
• 3-12 month lookback• Gather data for “hours of service” in
each of the weeks of the measurement period
• Divide by the number of weeks in the measurement period (can use pay per.)
• Be wary of equivalencies for monthly and yearly calculations
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What does this mean? Option #1: pay for insurance
• EHA may have low-premium plan• Don’t have to use current EHA plan• If 95% of FT employees are provided
insurance, no tax assessment• Affordability calculation and 50%
EHA underwriting rule only apply to a single plan
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What does this mean? Option #2: “offer” unaffordable ins.
• Subject to tax assessment of $3,000 per employee who obtains insurance and a credit on the exchange
• Have to be willing to pay ½ of the single premium if anyone takes ins.
• 5% surcharge determined separately for each EHA subgroup
• Offer date for 9/1/14 enrollment
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What does this mean? Option #3: don’t offer insurance to
classified staff at all for 14-15• $2,000 x (all FT EEs – 30)• Only pay this tax if one FT person
obtains insurance and credit on the exchange
• Possible staff survey: (1) Do you have insurance? (2) How do you get it?
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What does this mean? Option #4: cut hours / cut staff
• Look back window can be as short as 4th quarter for 13-14
• Employment at will• Contracts for 13-14• No RIF process for classified staff• Shared and part-time teachers:
consider carefully…
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What does this mean? SIT. TIGHT. DO NOT offer current EHA plan
(unless you want to) Take a deep breath, the ACA is a
monthly process, and you can always make adjustments around yearly EHA enrollment periods
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OBAMACARE: What You Don’t Know CAN Hurt You
Harding & Shultz(402) 434-3000
H & S School [email protected]@KarenHaase
[email protected]@btruhe