p atient p rotection & a ffordable c are a ct (ppaca) angela moore indiana state library intern...
TRANSCRIPT
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
Shared Responsibility for Employers Determining Full-Time with IRS Safe Harbors
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
18 IRS Notice 2012-58: http://www.irs.gov/irb/2012-41_IRB/ar07.html
Measurement
Admin
Stability
Measurement
Admin
Stability
Measurement
Admin
Stability
Shared Responsibility for Employers Determining Full-Time with IRS Safe Harbors
New Employees: reasonably expected to work full-time Offer at, or before, conclusion of initial 3 calendar
months
19 IRS Notice 2012-58: http://www.irs.gov/irb/2012-41_IRB/ar07.html
Shared Responsibility for Employers Determining Full-Time with IRS Safe Harbors
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
20 IRS Notice 2012-58: http://www.irs.gov/irb/2012-41_IRB/ar07.html
Shared Responsibility for Employers Determining Full-Time with IRS Safe Harbors
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)
21 IRS Notice 2012-58: http://www.irs.gov/irb/2012-41_IRB/ar07.html
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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