Is Your Business Ready for Health Care Reform in 2014?
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Is Your Business Ready for Health Care Reform in 2014?

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Many business owners are still confused about health care reform and how it affects their company. FrankCrum's Human Resources Director David Peasall is an expert in the area of the Affordable Care ...

Many business owners are still confused about health care reform and how it affects their company. FrankCrum's Human Resources Director David Peasall is an expert in the area of the Affordable Care Act. This is his webinar presentation that educates and clarifies how the new law affects employers and business owners.

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    Is Your Business Ready for Health Care Reform in 2014? Is Your Business Ready for Health Care Reform in 2014? Presentation Transcript

    • Are You Ready for Health Care Reform in 2014? David Peasall, SPHR Presenter Director of Human Resources, FrankCrum #ACAFrankCrum Cristina Lachowyn Moderator Digital Marketing Specialist, FrankCrum
    • Are You Ready for Health Care Reform in 2014? All employers are affected by the Affordable Care Act! What category am I in? Offering Health Coverage Not Offering Health Coverage Large Employer 100 or more Large Employer 100 or more Large Employer 50-99 Large Employer 50-99 Small Employer 49 or less Small Employer 49 or less
    • Are You Ready for Health Care Reform in 2014? What do I need to know about the February 2014 Employer Mandate Regulations? Is my company large or small? Do I have to offer health coverage to my employees? What happens if I don’t?
    • Are You Ready for Health Care Reform in 2014? What is a variable hour employee? Do I have any? What’s an Exchange Notice? How can I help employees understand the Individual Mandate?
    • Are You Ready for Health Care Reform in 2014? The Employer Mandate It means: Some businesses must either provide coverage - or pay a penalty. or
    • Is My Company Large or Small? An applicable large employer has 50 or more full and full time equivalent employees. • Fulltime = 30 or more hours of service • Fulltime Equivalent = all other ee’s Categorize ALL your employees by hours only in this step Important note: This includes controlled groups and affiliated services groups. Call your CPA or Corporate Legal Counsel if you have these.
    • What Category am I in? Offering Health Coverage Large Employer 100 or more (2015 category only) • Mandate applies in 2015 • Count and document • Exchange Notice • 90 days • Plan design • W2 • Variable hour/seasonal employees • Penalty potential • Offer to at least 70% (95% begins in 2016) Not Offering Health Coverage
    • What Category am I in? Offering Health Coverage Large Employer 100 or more (2015 category only) • Mandate applies in 2015 • Count and document • Exchange Notice • 90 days • Plan design • W2 • Variable hour/seasonal employees • Penalty potential • Offer to at least 70% (95% begins in 2016) Not Offering Health Coverage Large Employer 100 or more (2015 category only) • Mandate applies in 2015 • Count and document • Exchange Notice • Evaluate offering coverage vs. penalty cost
    • What Category am I in? Offering Health Coverage Large Employer 100 or more (2015 category only) • Mandate applies in 2015 • Count and document • Exchange Notice • 90 days • Plan design • W2 • Variable hour/seasonal employees • Penalty potential • Offer to at least 70% (95% begins in 2016) Large Employer 50-99 (2015 category only) • Mandate begins in 2016 • Count and document • Exchange Notice • 90 days • Plan design • W2 Not Offering Health Coverage Large Employer 100 or more (2015 category only) • Mandate applies in 2015 • Count and document • Exchange Notice • Evaluate offering coverage vs. penalty cost
    • What Category am I in? Offering Health Coverage Not Offering Health Coverage Large Employer 100 or more (2015 category only) • Mandate applies in 2015 • Count and document • Exchange Notice • 90 days • Plan design • W2 • Variable hour/seasonal employees • Penalty potential • Offer to at least 70% (95% begins in 2016) Large Employer 100 or more (2015 category only) • Mandate applies in 2015 • Count and document • Exchange Notice • Evaluate offering coverage vs. penalty cost Large Employer 50-99 (2015 category only) • Mandate begins in 2016 • Count and document • Exchange Notice • 90 days • Plan design • W2 Large Employer 50-99 (2015 category only) • Mandate begins in 2016 • Count and document • Exchange Notice • Evaluate coverage cost vs. penalty cost
    • What Category am I in? Offering Health Coverage Not Offering Health Coverage Large Employer 100 or more (2015 category only) • Mandate applies in 2015 • Count and document • Exchange Notice • 90 days • Plan design • W2 • Variable hour/seasonal employees • Penalty potential • Offer to at least 70% (95% begins in 2016) Large Employer 100 or more (2015 category only) • Mandate applies in 2015 • Count and document • Exchange Notice • Evaluate offering coverage vs. penalty cost Large Employer 50-99 (2015 category only) • Mandate begins in 2016 • Count and document • Exchange Notice • 90 days • Plan design • W2 Large Employer 50-99 (2015 category only) • Mandate begins in 2016 • Count and document • Exchange Notice • Evaluate coverage cost vs. penalty cost Small Employer 49 or less • No employer mandate • Count and document • Exchange Notice • 90 days • Plan design • W2
    • What Category am I in? Offering Health Coverage Not Offering Health Coverage Large Employer 100 or more (2015 category only) • Mandate applies in 2015 • Count and document • Exchange Notice • 90 days • Plan design • W2 • Variable hour/seasonal employees • Penalty potential • Offer to at least 70% (95% begins in 2016) Large Employer 100 or more (2015 category only) • Mandate applies in 2015 • Count and document • Exchange Notice • Evaluate offering coverage vs. penalty cost Large Employer 50-99 (2015 category only) • Mandate begins in 2016 • Count and document • Exchange Notice • 90 days • Plan design • W2 Large Employer 50-99 (2015 category only) • Mandate begins in 2016 • Count and document • Exchange Notice • Evaluate coverage cost vs. penalty cost Small Employer 49 or less • No employer mandate • Count and document • Exchange Notice • 90 days • Plan design • W2 Small Employer 49 or less • No employer mandate • Count and document • Exchange Notice • Offer coverage to attract and retain
    • Are You Ready for Health Care Reform in 2014? Employer Mandate is effective January 1st, unless… Several criteria may allow an employer to have a compliance date as of the plan renewal date (vs. January 1st) if the employer… • Does not reduce the size of its workforce or the overall hours of service of its employees from 2/9/14-12/31/14 to get below 100 • Does not eliminate or materially reduce health coverage offered as of 2/9/14 • Maintains no less than 95% of the employer contribution amount • Has a minimum value plan • Does not narrow or reduce eligibility classes • Had the plan on 12/27/2012 • Did not modify the plan renewal date to a later date • Enrolled 25% or offered to 33% • Certifies to the IRS in writing they meet these requirements
    • Are You Ready for Health Care Reform in 2014? Transition rule for determining large employer status for 2015 • May use a period of as few as six consecutive calendar months during the 2014 calendar year • Seasonal Worker exception applies on a calendar year basis IRS specifically confirms that an employee’s opportunity to enroll in PEO sponsored coverage qualifies as an offer of coverage for the client employer to be in compliance with the Employer Mandate!
    • Is My Company Large or Small? • ACA Company Size Calculator • Health Care Reform Summary • Listen to the on-demand webinar at FrankCrum.com http://www.frankcrum.com/business-resources/affordable-care-act/
    • Is My Company Large or Small? Let’s try going through a sample calculation:
    • Do I Have to Offer Health Coverage to My Employees? Everyone is affected by the Affordable Care Act! But if you’re a large employer – there are some important requirements you need to know about. Large Employers Have Two Options: #1 – Offer minimum essential coverage OR #2 – Pay the tax penalty 2015: 100 fulltime employees minus 80 (2015 only) = 20 X $2,000 = $40,000) 75 fulltime employees (no employer mandate in 2015 for employers 50-99) 2016: 100 fulltime employees minus 30 = 70 X $2,000 = $140,000 75 fulltime employees minus 30 = 45 X $2,000 = $90,000
    • Do I Have to Offer Health Coverage to My Employees? Terminology Start Do you have at least 50 full-time and fulltime equivalent (FTE) employees? Yes Do you offer a plan providing MEC to at least 95% of all fulltime employees and their dependents? Pay or Provide Decision Chart No No Penalty 100 ee’s + 70% 2015 only No Yes Does the plan have Minimum Value and is it Affordable Coverage? No Yes Did you miss offering coverage to up to 5 or 5% of full-time employees? No No Penalty Yes Is any employee enrolled in an Exchange and receiving a tax credit subsidy? 100 ee’s + -80 2015 only Yes Yes Yes No Annual tax penalty $2,000 x (# of fulltime employees -30) Monthly penalty is 1/12th of $3,000 per month covered x (# of full-time employees receiving an Exchange tax credit), not to exceed $2,000 x (# of fulltime minus 30). Full-time and Full-time Equivalent Employees – Add the total number of full-time employees (30 hours or more per week) for the month, plus the total number of hours worked in a month by all other employees, divided by 120). Reduce for Seasonal Worker exception if applicable. Affordable Coverage – The paycheck cost of the employee only tier of coverage must not exceed 9.5% of employee’s pay. Minimum Value Plan – Plan that covers at least 60% of health care expenses. Minimum Essential Coverage (MEC) – A plan providing certain PPACA required benefits.
    • Are You Ready for Health Care Reform in 2014? See the “Pay or Provide Calculator” at FrankCrum.com
    • How are Health Care Plan Requirements Changing? 1. 90 day maximum waiting period • Based on applicability date in 2014 • Offering coverage as of “the first of the month following 90 days of employment” is no longer allowed 2. W-2 Reporting • Total annual premium of the employer sponsored health coverage
    • How are Health Care Plan Requirements Changing? Plan design: • No annual or lifetime limits • No more pre-existing conditions • Dependents must be covered up to age 26 • Child vision/dental must be included in the plan
    • What is a Variable Hour Employee? What if not all of my employees work the same number of hours in a given work week? Do I have to offer them health care coverage? These are called “Variable Hour Employees” – and they need to be accounted for!
    • What is a Variable Hour Employee? Variable Hour Employer Calculator
    • What is an Exchange Notice? All employers must provide this notice to every employee! 1. Within 14 days of employment 2. Must answer basic questions: • What plans are offered? • Number of hours required? • What is “affordable” according to ACA? • What is a plan’s “minimum value”? • Who is your company’s contact person?
    • What is an Exchange Notice? Sample Model Notice
    • How Can I Help Employees Understand the Individual Mandate? See the “Guide to Health Care Reform for Individuals” at FrankCrum.com
    • When Does All of This Take Effect? 2014 1. Track employee hours per calendar month to determine small or large employer status for 2015 2. Waiting periods must be no longer than 90 days 3. File health plan information on the business tax return (voluntary) 4. Individual mandate in effect: obtain coverage or pay the tax penalty 5. Exchange Notices must be provided to all new employees within 14 days of employment 6. Watch for more regulations (such as tax filing forms 6055 and 6056 and discrimination testing)
    • When Does All of This Take Effect? 2015 1. Employer mandate begins for employers of 100 or more employees - provide coverage in 2015 or pay the tax penalty in 2016 2. File health plan information on business tax return 3. Individual mandate tax increases
    • What Category am I in? Offering Health Coverage Not Offering Health Coverage Large Employer 100 or more (2015 category only) • Mandate applies in 2015 • Count and document • Exchange Notice • 90 days • Plan design • W2 • Variable hour/seasonal employees • Penalty potential • Offer to at least 70% (95% begins in 2016) Large Employer 100 or more (2015 category only) • Mandate applies in 2015 • Count and document • Exchange Notice • Evaluate offering coverage vs. penalty cost Large Employer 50-99 (2015 category only) • Mandate begins in 2016 • Count and document • Exchange Notice • 90 days • Plan design • W2 Large Employer 50-99 (2015 category only) • Mandate begins in 2016 • Count and document • Exchange Notice • Evaluate coverage cost vs. penalty cost Small Employer 49 or less • No employer mandate • Count and document • Exchange Notice • 90 days • Plan design • W2 Small Employer 49 or less • No employer mandate • Count and document • Exchange Notice • Offer coverage to attract and retain
    • Are You Ready for Health Care Reform in 2014? Need Help? Legal Notice – The purpose of this information is to assist in the discussion of risk, concerns and general requirements. It is not legal counsel, tax advice or judgment of a business’s compliance or non-compliance. It is recommended that you seek qualified tax and legal counsel familiar with your particular circumstances before taking any action.