More Related Content Similar to Adp Affordable Care Act 112812 Final[1] (20) Adp Affordable Care Act 112812 Final[1]1. Mitigating Risk and Controlling Healthcare
Costs: A Post Election Look at the
Affordable Care Act
November 28, 2012
Presented in partnership with:
hashtag #adpwebinar
2. Today’s Speakers
John A Haslinger
A. Peter J. Marathas Jr.
J Jr
Vice President Partner
Benefits Outsourcing Consulting Employee Benefits, Executive Compensation
ADP, Inc. and ERISA Litigation, Benefits
Proskauer Rose LLP
Join the conversation on Twitter by tweeting along or
following the hashtag #adpwebinar.
2© ADP, Inc. 2012. All Rights Reserved.
3. Disclaimer
This presentation is not:
Legal Advice
Th fi l word on H lth C
The final d Health Care R f
Reform
A political opinion
*Note: Data gathering is voluntary and only gathered after receiving client approval
3 © ADP, Inc. 2012. All Rights Reserved.
5. Initial Observations
Key Components:
Individual Mandate (2014)
– Subsidies &
– Penalties
Insurance Mandates
State Mandates
Employer Mandates
5 © ADP, Inc. 2012. All Rights Reserved.
6. Initial Observances ctd.
Affordable Care Act (ACA) is not Health Care Reform
Cost of providing care is not addressed seriously in ACA
Costs Will Increase
Direct Cost$ ► Premium Increases
► Taxes
► Penalties
Indirect Cost$ ► Administrative Costs
Unknown Cost$ ► Agency Action
6 © ADP, Inc. 2012. All Rights Reserved.
7. Healthcare Exchanges
All states to establish an Exchange by January 1, 2014
– The American Health Benefit Exchange
g
– Small Business Health Options Program (SHOP) Exchange for individuals and small businesses
States must demonstrate to federal government that efforts are underway by January 1,
2013
Types of Exchanges:
– State Exchange
– Partnership Exchange
– Federally Facilitated Exchange
Blue Prints
– States pursuing a State-based Exchange must advise HHS by November 16, 2012 and submit
Blueprint by December 14
7 © ADP, Inc. 2012. All Rights Reserved.
9. Polling Question #1
1. Do you plan some time in the future to obtain
insurance for your employees through a public
Exchange? ?
Yes
No
9 © ADP, Inc. 2012. All Rights Reserved.
10. Healthcare Exchanges ctd.
The Metals—Exchanges to Offer Four Levels of Coverage:
Bronze (60%)
Silver (70%)
Gold (80%)
Platinum (90%)
And: a catastrophic plan f individuals under 30
for
Insurers may offer separate health plan products outside of an Exchange, but they
are prohibited from offering rates for those health plan products that are lower
than those offered within the Exchange
10 © ADP, Inc. 2012. All Rights Reserved.
11. Pay or Play Mandates: 90 Day Requirements
Effective first day of plan year on or after January 1, 2014
Guidance Released August 31 2012 is effective through 2014
31,
90 days means 90 days within the first day they are eligible
If employees can elect within 90 days but fail to elect within 90 days it is not a
violation
Employer may use a reasonable period to determine eligibility if (a) period is
not designed to avoid the 90 day period, (b) individual becomes eligible within
90 days of being assessed eligible or, if earlier, within 13 months of start date
(p
(plus the days to the first day of the next calendar month if the employee’s start
y y p y
date is the middle of the month)
11 © ADP, Inc. 2012. All Rights Reserved.
12. Polling Questions #2 and #3
2. Are you considering opting out of providing group
health insurance in the future?
Yes
No
3. Are you considering making significant coverage or
premium contribution changes to your group health
plans in the future?
Yes
No
12 © ADP, Inc. 2012. All Rights Reserved.
13. Employer “Pay or Play” Mandate
In 2014, the pay-or-play mandate requires employers of 50 FTE or more to
offer quality, affordable health insurance coverage to full time employees
(those working on average at least 30 hours per week) and their families
Failure to offer such coverage potentially subjects the employer to taxes for a
given month—if:
(i) a full time employee (ii) receives a subsidy in (iii) a state exchange
13 © ADP, Inc. 2012. All Rights Reserved.
14. What Are The Pay or Play Penalties?
Employers who “opt out” of providing benefits
Employers who do not provide health coverage to all full time employees (and
their dependents) are penalized
– If at least one full time employee (30+hrs/wk or 130+ hrs/mo) is eligible for, or
receives, a subsidy in a state exchange: the employer is subject to an annual
penalty of $2,000 × all full time employees (except for the first 30) applies
– Penalty is assessed monthly (i e $167 67 per full time employee per month)
(i.e., $167.67
14 © ADP, Inc. 2012. All Rights Reserved.
15. What Are The Pay or Play Penalties ctd.
Employers who provide “unaffordable” coverage
Coverage is affordable only if the premium for single coverage under the
employer’s lowest cost plan with at least a 60% “actuarial value” does not
exceed 9.5% of household income (or W-2 wages)
Annual penalty is the lesser of $3,000 for each full time employee who receives
a subsidy through a state exchange, or $2,000 multiplied by all full time
employees (subtracting first 30)
– Penalty is assessed monthly (i.e., $250 per subsidy-receiving full time employee per
month)
15 © ADP, Inc. 2012. All Rights Reserved.
16. Variable Employees & Full Time Employee Status
A Variable Employee: On start date, it cannot be determined whether
employee is expected to work on average at least 30 hours per week
Initial Measurement Period of Between 3 and 12 months
– Assess average during Initial Measurement Period
– Assessment is then used for stability period that is the same as for ongoing employees
Use of Administrative Period: can use an “administrative period” but total can
not exceed 13 months (plus the remainder of the month if anniversary falls in
middle of month)
16 © ADP, Inc. 2012. All Rights Reserved.
17. Medicaid Expansion & Employers
Medicaid Expansion Requirements:
– New Medicaid class of beneficiaries
– ACA required states to cover all individuals under age 65 with income below 133% of
the poverty line
– "Essential benefits" must be provided to all Medicaid recipients
Failure to comply = loss of all federal funds
Court struck down as Unconstitutional (7-2): putting a gun to the head of the
states
This may have an impact on employers
17 © ADP, Inc. 2012. All Rights Reserved.
19. The ACA Litigation Minefield
DOL, IRS and HHS audits will increase
– Already seeing audits of grandfathered status by
DOL under the Act
DOL efforts focus on increasing employer
compliance rather than assessing penalties in
early years
Participant lawsuits may follow as participants
seek to enforce benefit mandates
19 © ADP, Inc. 2012. All Rights Reserved.
20. The ACA Litigation Minefield ctd.
Employee Claims Under the Act
Workforce Realignment
Retiree Medical Exit Strategy
Claims to Mandated Benefits
Whistleblower Actions
20 © ADP, Inc. 2012. All Rights Reserved.
21. Summary of Benefits and Coverage
The Basics
Final Rule effective September 23, 2012
23
SBC cannot exceed four double-sided pages in length and must be "culturally
and linguistically appropriate"
g y pp p
SBC must be accompanied by the "uniform glossary", available at
www.healthcare.gov and www.dol.gov/ebsa/healthreform/
HHS forms available http://cciio.cms.gov/resources/other/index.html#sbcug
Upon renewal an SBC need only be provided for the benefit option in which a
renewal,
participant is enrolled, unless SBCs for other options are requested
SBC is in addition to Summary Plan Description requirement
21 © ADP, Inc. 2012. All Rights Reserved.
22. W-2 Reporting of Healthcare Costs
Beginning with 2012 Forms (i.e., Forms issued in January 2013), employers
must report aggregate cost of health coverage
Small Employer Exception: those issuing less than 250 W-2's in prior year
exempt until further guidance issued
Reportable cost includes the entire cost of the coverage (without any reduction
for employee contributions)
Cost of coverage is determined under rules similar to those for determining
COBRA premiums (excluding 2% administrative charge)
22 © ADP, Inc. 2012. All Rights Reserved.
23. $2500 Health FSA Limit
Effective for plan years beginning in 2013:
Limits annual employee contributions to $2,500
Indexed to the CPI starting in 2014
Does not limit employer contributions
To Do:
– Communication to begin in 2012 (2nd half)
– Plan amendments recommended by start of 2013 plan year
However, despite the cafeteria plan rule that amendments must apply prospectively, an amendment adopted by
December 31, 2014 may apply retroactively if the plan complied with the $2,500 limit starting with plan years
beginning in 2013
23 © ADP, Inc. 2012. All Rights Reserved.
24. Select Taxes: Comparative Effectiveness Fee
Effective for plan years ending after September 30, 2012 and before October 1,
2019
$2 fee per member per year
– Paid by insurers if insured plan
– Paid by plan sponsor if self-funded plan
Fee reduced to $1 for plan years ending before October 1 2013
1,
For plan years beginning after September 30, 2014, fee increases based on
national health expenditures
p
Fee supposed to sunset after 2019
24 © ADP, Inc. 2012. All Rights Reserved.
25. Select Taxes: Transitional Reinsurance Program
Assessment on carriers and TPAs (on behalf of self-funded plans)
– Generally applies to all group health plans – no exceptions for non-ERISA
plans (e.g., governmental or church plans)
– Applies on a per-member basis
– Does not apply to HIPAA-excepted benefits
Applies to 2014-2016 plan years
Intended to stabilize premiums in the individual markets
Additional employer recordkeeping and cost requirements
25 © ADP, Inc. 2012. All Rights Reserved.
26. Non-Discrimination Rules
Delayed Until Guidance Released
– Now That The Election Is Over, Guidance Will Follow
Will apply to non-grandfathered, fully-insured plans after release (already apply
to self-insured)
Prohibits discrimination in favor of “highly compensated employees” with
respect to eligibility & benefits
– Note: Testing Performed on a Controlled Group Basis
Penalty: up to $500,000 Under ACA
26 © ADP, Inc. 2012. All Rights Reserved.
27. Compliance
SBC Requirements
Excise Tax
Exchanges
Shared Responsibility
27 © ADP, Inc. 2012. All Rights Reserved.
28. Compliance Is Not Limited To Health Care Reform
A complex lengthy and ever changing list of requirements
complex, lengthy,
Health Care Reform (PPACA)
Internal Revenue Code (not limited to the following)
Sec. 79 Sec. 127
Sec. 105 Sec. 129
Sec. 125
Sec. 132 The requirements
Imputed Income under Health Care
IRC Sec. 152 Ad lt
Adult Reform are i addition
R f in dditi
Same Gender Marriage children to all of the other
up to age regulatory
CA SB 1386 (information privacy) 26 requirements that
benefit plan sponsors
ERISA already have to comply
with
HIPAA
834 Enrollment Privacy Rule
820 Premium Payment
y Security Rule
Sarbanes-Oxley Act of 2002
SAS70 Type II audit reports
FMLA Mental Health Parity
ADAAA GINA
ADEA COBRA
28 © ADP, Inc. 2012. All Rights Reserved.
29. A Simple Summary Of Complex Rules
NOT MUCH HAS CHANGED
29 Source: House Joint Economic Committee, August 2, 2010 11
© ADP, Inc. 2012. All Rights Reserved.
30. Managing Change: A Multifaceted Approach
Workforce Strategy Data Analytics
(Total Rewards / Employer of Choice) Benchmark Data
Recruitment Trend Analysis
Scope and scheduling Audits
Salary planning Decision Support Tools
Reliance on sources, may not be
readily available
Benefits
B fit
Administration
Design and Compliance Communications
Plan options St t
Strategy
Planning for 2014 and beyond Design
Federal and State Medium (Print, On-line, Mobile,
Social Media)
PPACA
Education
Testing, Reporting &
Reconciliation
Consumerism and Wellness – The Foundation
Incorporate with Plan Design Outcomes
Incentives Managing risk
30 © ADP, Inc. 2012. All Rights Reserved.
31. Compliance Analysis Is Lacking To Date
Source: ADP Research Institute Survey of Employers, May 2012
31 © ADP, Inc. 2012. All Rights Reserved.
32. Plan Design Strategies: Multiple Levers
Wellness is emerging as a key component of employer’s health care strategy
– The larger the employer, the more likely they have implemented Wellness
Reductions in the scope and number of plans offered is also increasing
– Increases in deductibles and co-insurance have become more common compared
to 2011 (will run into limitations under ACA)
Steps Taken/Currently Doing/Definitely Will Do
Small Midsized Large
(1‐49 EEs) (50‐999 EEs) (1,000+ EEs)
Offer wellness programs
76%
Offer HSAs 62%
Increase EE
55%
deductibles/contribution
Offer a HDHP option 54%
Increase employee
48%
co‐pays
Offer HRAs 46%
Source: ADP Research Institute Survey of Employers, May 2012
32 © ADP, Inc. 2012. All Rights Reserved.
33. Major Forthcoming Employer Requirements
Under Health Care Reform
Communication Requirements Taxes and Fees
Summary of Benefits and Coverage Include value of Health benefits on W-2:
(SBC): 9-23-12 1-1-12
Claims and Appeals Notices: 1-1-12 Clinical Effectiveness Research Fee:
10-1-12
Exchange Notification: 3-1-13 Medicare payroll tax increases: 1-1-13
Plan Changes Requiring employers to “pay or
q g p y p y
play”
FSA Annual Plan Limit of $2,500: 1-1-13
Shared responsibility requirements:
Eliminate: 1-1-14 1-1-14
– Pre-existing condition exclusions – Look-back approach may require changes
pp y q g
in 2013
– Annual and Lifetime coverage limits
– Coverage rescissions Reporting
Guaranteed issue: 1-1-14 Employer Health Insurance Coverage
Reporting: 1-1-14
1 1 14
Waiting periods limited to 90 days:
1-1-14 40% Excise Tax on high cost plans:
1-1-18
Cost sharing limits on cost sharing with
Employees: 1-1-14
p y Excise tax limits indexed to CPI
Wellness Incentives expanded: 1-1-14
Auto-Enrollment: TBD – Likely 2015
33 © ADP, Inc. 2012. All Rights Reserved.
34. Employer Requirements: Details Not Yet Clear
Non-Discrimination Testing Look-Back Rules
Implementation delayed Unclear as to how people who are
unemployed during a look-back
Anticipate effective date of 1 1 15
1-1-15 period are to be treated for
Significant implications purposes of calculating average
hours per week per calendar
– Ability to use aggressive pricing month
– Carving out populations – Example: Teachers working 10
months per year but collecting
Auto Enrollment unemployment for 2 months
Implementation delayed Guidance requested
Anticipate effective date of 1-1-15 Multi-Employer Benefit Trusts
Significant implications Unclear how various rules related
– Cost to Excise Tax, Shared
,
Responsibility, etc. will apply in
– IRC Sec. 125 instances when benefits are
provided through trust rather than
directly by employer
34 © ADP, Inc. 2012. All Rights Reserved.
35. ACA Impact On Employer Sponsored Plans
Shared responsibility coverage requirements coupled with ongoing health care inflation will reduce
employers’ ability to design health care plans that act as a differentiating component of total
compensation and will increase likelihood of employers:
– Eliminating / reducing coverage
– Focusing on consumer based solutions
HDHPs, HRAs, HSAs, Wellness
– Potentially moving some employees to exchanges for coverage
40% E i T O Cost of C
Excise Tax On C t f Coverage Ab
Above Li it
Limit
$10,200 for Individual “Cadillac Tax” $27,500 for family
Strategic Benefit Plan Design
Includes
I l d ER and EE d The value of
Contributions for: strategic
Lobbying Pressure
New Cos Drivers
Note: Medical benefit
Medical Inflation
Medical
inflation continues to design will
Rx
Ins Co Fees
rise at 2 to 3 times shrink over
the rate of overall ASO Fees
st
time due t
ti d to
F
I
inflation – and has FSA
done so for more HRA Health Care
than 50 years* HSA Reform
Coverage R
C Requirements
i
The Excise Tax Applies To Both Grandfathered Plans and Non-Grandfathered Plans
35 © ADP, Inc. 2012. All Rights Reserved. *Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, U.S.
Department of Commerce, Bureau of Economic Analysis Sources
36. Example: Estimating Excise Tax in 2018
Individual Coverage
Assumptions
– Healthcare plan costs in 2011: Individual - $5,429*; (includes ASO fees)
– Average annual FSA contribution of $750* (held constant - not increased for any inflation
assumption)
p )
Individual Coverage ($5,429 in 2011)
$25,000
10.5% Trend
$23,000
$21,000
$19,000
8.5% Trend
$17,000
$17 000
$15,000
6.2%% Trend
$13,000
3.5% CPI
$11,000
$9,000
$7,000
$5,000
18 19 20 21 22 23 24 25
36
20 20 20 20 20 20 20 20
© ADP, Inc. 2012. All Rights Reserved. *Source: Kaiser Family Foundation, 2011 Employer Health Benefits Survey
37. Example: Estimating Excise Tax in 2018
Family Coverage
Assumptions
Healthcare plan costs in 2011: Family - $15,073*; (includes ASO fees)
Average annual FSA contribution of $1,250* (held constant - not increased for any inflation
assumption)
p )
Family Coverage ($15,073 in 2011)
$65,000 10.5% Trend
$60,000
$55,000
$50,000 8.5% Trend
$45,000
$45 000
$40,000
6.2%% Trend
$35,000
3.5% CPI
$30,000
$25,000
$20,000
$15,000
18 19 20 21 22 23 24 25
20 20 20 20 20 20 20 20
37 © ADP, Inc. 2012. All Rights Reserved. Source: Kaiser Family Foundation, 2011 Employer Health Benefits Survey
38. Example: Estimating Excise Tax in 2018
Estimated Tax Liability
Number of Employees: 2,500
Individual Coverage 20% Family Coverage 80% Total 100%
Year 6.20% 8.50% 10.50% 6.20% 8.50% 10.50% 6.20% 8.50% 10.50%
2018 $0 $32,020 $294,167 $0 $345,083 $3,256,360 $0 $377,104 $3,550,527
2019 $0 $123,992 $452,104 $0 $1,389,415 $5,033,278 $0 $1,513,408 $5,485,382
2020 $0 $227,352 $631,623 $0 $2,561,016 $7,050,672 $0 $2,788,367 $7,682,295
2021 $0 $343,191 $835,165 $0 $3,872,049 $9,335,679 $0 $4,215,241 $10,170,844
2022 $0 $472,702 $1,065,432 $0 $5,335,763 $11,918,351 $0 $5,808,465 $12,983,783
2023 $0 $617,179 $1,325,418 $0 $6,966,579 $14,831,963 $0 $7,583,757 $16,157,382
2024 $15,706 $778,033 $1,618,439 $314,137 $8,780,193 $18,113,356 $329,843 $9,558,226 $19,731,795
2025 $75,087 $956,800 $1,948,163 $1,001,791 $10,793,690 $21,803,312 $1,076,878 $11,750,490 $23,751,475
Number of Employees: 5,000
Individual Coverage 20% Family Coverage 80% Total 100%
Year 6.20% 8.50% 10.50% 6.20% 8.50% 10.50% 6.20% 8.50% 10.50%
2018 $0 $64,041 $588,333 $0 $690,167 $6,512,720 $0 $754,207 $7,101,054
2019 $0 $247,984 $904,208 $0 $2,778,831 $10,066,556 $0 $3,026,815 $10,970,764
2020 $0 $454,703 $1,263,246 $0 $5,122,031 $14,101,344 $0 $5,576,734 $15,364,591
2021 $0
$ $686,383
$ $1,670,329
$ $0
$ $7,744,099
$ $18,671,358
$ $0
$ $8,430,482
$ $20,341,687
$
2022 $0 $945,404 $2,130,863 $0 $10,671,527 $23,836,702 $0 $11,616,930 $25,967,566
2023 $0 $1,234,358 $2,650,837 $0 $13,933,157 $29,663,927 $0 $15,167,515 $32,314,763
2024 $31,412 $1,556,066 $3,236,878 $628,274 $17,560,385 $36,226,713 $659,686 $19,116,451 $39,463,591
2025 $150,175 $1,913,600 $3,896,325 $2,003,582 $21,587,380 $43,606,624 $2,153,757 $23,500,980 $47,502,949
Number f Employees:
N b of E l 10,000
10 000
Individual Coverage 20% Family Coverage 80% Total 100%
Year 6.20% 8.50% 10.50% 6.20% 8.50% 10.50% 6.20% 8.50% 10.50%
2018 $0 $128,082 $1,176,667 $0 $1,380,333 $13,025,441 $0 $1,508,415 $14,202,107
2019 $0 $495,969 $1,808,417 $0 $5,557,661 $20,133,112 $0 $6,053,630 $21,941,529
2020 $0 $909,406 $2,526,493 $0 $10,244,063 $28,202,689 $0 $11,153,469 $30,729,181
2021 $0 $1,372,765
$1 372 765 $3,340,658
$3 340 658 $0 $15,488,198
$15 488 198 $37,342,717
$37 342 717 $0 $16,860,963
$16 860 963 $40,683,375
$40 683 375
2022 $0 $1,890,807 $4,261,727 $0 $21,343,053 $47,673,404 $0 $23,233,861 $51,935,131
2023 $0 $2,468,715 $5,301,673 $0 $27,866,314 $59,327,853 $0 $30,335,030 $64,629,527
2024 $62,824 $3,112,132 $6,473,755 $1,256,548 $35,120,771 $72,453,426 $1,319,373 $38,232,903 $78,927,181
2025 $300,349 $3,827,200 $7,792,650 $4,007,165 $43,174,760 $87,213,248 $4,307,514 $47,001,959 $95,005,899
38 © ADP, Inc. 2012. All Rights Reserved.
39. Polling Questions #4 and #5
4. Have you estimated your potential liability under the
2018 Excise Tax limits?
Yes
No
5. Will you be making plan changes as a result of these
estimates?
Yes
No
39 © ADP, Inc. 2012. All Rights Reserved.
40. Decision Support Tools Will Become
More Important Under ACA
Types of Decision Support Tools Offered
Most employers do NOT offer Decision
Support Tools
– Only 25% of small employers
– Only 44% of large employers
Th
Those employers who d offer these
l h do ff h
tools, make them available to the majority
of employees
In most cases (53%) the tools are available
throughout the entire year - not only at
annual enrollment
SIGNIFICANT GAP:
PREFERENCE MODELING
Source: ADP Pulse Survey of Employers, September 2011
40 © ADP, Inc. 2012. All Rights Reserved.
41. Decision Support: Cost And Preference Calculator
Enables
participants
to compare
preference
and price at
the same
time
ti
41 © ADP, Inc. 2012. All Rights Reserved.
42. Benefit of the Analytical Tools:
Market Research
Associate preferences, Decision
cost estimates Tool
g
generated during g Results
Annual Enrollment
Aggregate Analytical
Data in Central Tools
Data Storage
Data feed Demographic
& Enrollment Use analytical tools to
from Annual Choice Data analyze associate
Enrollment
selection behavior
Use market research techniques to learn about population’s
“purchasing” behavior
Examine overall population trends and behaviors
Id if and characterize population segments
Identify d h i l i
*Note: Data gathering is voluntary and only gathered after receiving client approval
42 © ADP, Inc. 2012. All Rights Reserved.
43. Employer Shared Responsibility Provisions
Key Elements
New definition of “full-time” employee
– Applies only to healthcare benefits
– Average hours per week per calendar month tracking of FT status
Is employer sponsored coverage offered?
Is it sufficient?
– Coverage standards and minimum actuarial value
Is it affordable?
– Premiums not more than 9.5% of W-2 Box 1
Key considerations
– Does employee enroll in coverage through a state exchange (impact may vary if
enrolled in a federal exchange)
– Is the employee receiving subsidized Exchange coverage?
43 © ADP, Inc. 2012. All Rights Reserved.
44. Employer Mandates - Pay or Play?
IRS Shared Responsibility Assessment
A monthly “penalty” for large employers who:
− Either don’t offer coverage
don t
− Whose employees would have to pay over 9.5% of their W-2 income for coverage
− If any “full time” employees instead receive subsidized Exchange coverage
Does Not Offer Coverage Offers Health Coverage
No FT employees receive One or more FT employees No FT employees receive One or more FT employees
credits for Exchange receive credits for credits for Exchange receive credits for
coverage
g Exchange coverage
g g coverage
g Exchange coverage
g g
No penalty • # of FT employees (minus No penalty Lesser of :
30) x $2,000 annually
($166.67/month) • # of FT employees (minus
30) x $2,000 annually, or
•# of FT employees who
received Exchange
subsidies x $3,000
annually.
• ($250/month/EE)
44 © ADP, Inc. 2012. All Rights Reserved.
45. Polling Questions #6 and #7
6. Are you considering moving more employees to part-time status (below 30
hours per week)?
Yes
No
7. Do you plan on offering coverage ONLY through a state or federal exchange
once that option is available?
Yes
No
Will depend on the quality of the Exchanges
Not sure
45 © ADP, Inc. 2012. All Rights Reserved.
46. Employees May Qualify For Federal Subsidies At
Fairly High Income Levels
Part-Time Eligibility
Employees Who Work 30 Hrs or More Per Wk - 130 hrs of work in a calendar month
• Employers Must Make Coverage Available
• Failure will result in a penalty for each employee if any ONE employee receives subsidized coverage
through an exchange
• Seasonal employees can possibly be excluded by using the look-back/stability period safe harbor
Income Levels For 400% Of FPL (Indexed For Inflation)
Federal Poverty Level: 2012
No. Persons In Family 48 Contiguous States 48 Contiguous States/DC
1 $11,170 $44,680
2 $15,130
$15 130 $60,520
$60 520
3 $19,090 $76,360
4 $23,050 $92,200
5 $27,010 $108,040
6 $ ,
$30,970 $
$123,880
,
7 $34,930 $139,720
8 $38,890 $155,560
Source: Federal Register 4200,January 23, 2009, http://aspe.hhs.gov/poverty/12poverty.shtml
Employers will need an integrated solution addressing Benefits-TLM-Payroll
p y g g y
Median Household Income In The U.S. was $49,445 In 2010
U.S. Census Bureau – http://www.census.gov/prod/2011pubs/p60-239.pdf
U.S. Census Bureau – http://www.census.gov/newsroom/releases/archives/income_wealth/cb11-157.html
46 © ADP, Inc. 2012. All Rights Reserved.
47. Maximum Premium Payment Under ACA
(For The 48 Contiguous States and D.C.)
Maximum Premium
Percent of Federal As % Of Income Maximum Amount Of Annual Premium By Family Size
Poverty Level (2014) 1 2 3 4
FPL in 2012 $11,170 $15,130 $19,090 $23,050
100% 2.00% $223 $303 $382 $461
133% 2.00%
2 00% $297 $402 $508 $613
133.01% 3.00% $446 $604 $762 $920
150% 4.00% $670 $908 $1,145 $1,383
200% 6.30% $1,407 $1,906 $2,405 $2,904
250% 8.05% $2,248 $3,045 $3,842 $4,639
300% 9.50% $3,183 $4,312 $5,441 $6,569
350% 9.50% $3,714 $5,031 $6,347 $7,664
400% 9.50% $4,245 $5,749 $7,254 $8,759
Maximum Premium
Percent of Federal As % Of Income Maximum Amount Of Monthly Premium By Family Size
Poverty Level (2014) 1 2 3 4
FPL in 2012 $11,170 $15,130 $19,090 $23,050
100% 2.00% $19 $25 $32 $38
133% 2.00% $25 $34 $42 $51
133.01% 3.00% $37 $50 $63 $77
150% 4.00% $56 $76 $95 $115
200% 6.30% $117 $159 $200 $242
250% 8.05% $187 $254 $320 $387
300% 9.50% $265 $359 $453 $547
350% 9.50% $310 $419 $529 $639
400% 9.50% $354 $479 $605 $730
Source: CRS computation based on “Annual Update of the HHS Poverty Guidelines,” 74 Federal Register 4200,
January 23, 2009, http://aspe.hhs.gov/poverty/09fedreg.pdf, and PPACA, for the second-least-expensive silver plan
available to eligible individuals. If individuals choose more expensive plans, they would be responsible for
additional premiums.
47 © ADP, Inc. 2012. All Rights Reserved. Note: Premium payment cannot exceed the actual cost of a plan
48. Determining Full-Time Status
Two Basic Choices
Real-time calculation
Look-back approach
Real-time can result in employees moving into and out of benefit eligibility on a
monthly basis
Will result in significant COBRA activity
Look-back minimizes this issue
Requires time tracking by calendar month beginning in 2013
© ADP, Inc. 2012. All Rights Reserved.
49. Real-Time Example
J F M A M J J A S O N D
Average Hours
Worked 31 29 29 32 28 27 30 30 28 30 28 28
Attains F-T
Status Y Y Y Y
Enrollment
Period
Coverage Period
COBRA Notices
Sent
49 © Copyright 2012 ADP, Inc
50. Measurement Periods with Administrative Periods
Look-Back
Measurement Period Stability Coverage Period
2012 2013 2014
O N D J F M A M J J A S O N D J F M A M J J A S O N D
3 Months 6 Months
2012 2013 2014
O N D J F M A M J J A S O N D J F M A M J J A S O N D
6 Months 6 Months
2012 2013 2014
O N D J F M A M J J A S O N D J F M A M J J A S O N D
9 Months 9 Months
2012 2013 2014
O N D J F M A M J J A S O N D J F M A M J J A S O N D
12 Months 12 Months
50 © ADP, Inc. 2012. All Rights Reserved.
51. ADP’s Dynamic Workforce Model
HCM Integration Is Critical
Service Systems
Compliance Practices
51 © ADP, Inc. 2012. All Rights Reserved.
52. Shared Responsibility Requirements
Driving Demand For HCM Integration
On average, survey respondents indicated that
part-time employees comprise
–18% of labor force for midsized employers
p y
– 20% of labor force for large employers
Payroll
Hours Admin &
Gross Call Center
Worked
To Net
Applicant
Mgt W-2
Earnings
Tax
HR/PR
Filings
Portal
Enrollment Decision
ate a s
Materials Support Benefits Time
Tools
T l Time Collection
Mobile
Scheduling Tech
Benefits Eligibility Open & Auto Time Audit
Admin & Determination Enrollment Tools
Call Center
Licenses
COBRA Certificates
Carrier Direct
Files ACA
Bill
Penalty
Disperse- Estimation
ments
What if a part-time employee works
It is no longer just a Benefits event.
more 130 hours in a month?
52 © ADP, Inc. 2012. All Rights Reserved.
53. ADP Integrated Solution:
Shared Responsibility Requirement Under ACA
Automate beyond core payroll and benefits to
achieve results in order to provide a seamlessly
integrated solution
Workforce management
– Notices sent to managers as employees
approach 30 hours in any week
– Ability of managers to see scheduled hours
for all employees in order to manage hours
p y g
assigned in conjunction with liability for
health care costs
Managing Shared Responsibility Requirements
Database of record
– Payroll tracks actual hours worked
Employer
–PPayroll send automated t i
ll d t t d trigger t b
to benefit
fit
Mandates
administration system when employee Supported By
exceeds 130 hours per month Integrated HCM
Benefits administration
– Employee e g b ty ca cu at o is t gge ed
p oyee eligibility calculation s triggered
– Appropriate look-back and coverage period
rules are applied
– Employee is notified of eligibility – avoiding
penalty
R
Reporting and reconciliation
ti d ili ti
– Federal and state reporting
– Reconciliation with penalty assessments
53 © ADP, Inc. 2012. All Rights Reserved.
55. Thank You
Please submit all questions through the post-event survey you will see
on your screen shortly from HR.com. We will address them directly.
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© 2012 ADP, Inc.