What You Need to Know About the Affordable Care Act and How Workforce Management Can Help

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This webinar, led by professional workforce management consultants from Axsium Group, provides human resource professionals with definitions, processes and strategies to classify new and ongoing …

This webinar, led by professional workforce management consultants from Axsium Group, provides human resource professionals with definitions, processes and strategies to classify new and ongoing employees under PPACA. We will use real-life examples that demonstrate:

- Safe harbor methods for determining the full-time status of employees

- Rules for transitioning employees from new to ongoing

- Length of the “look-back” period and its impact on the stability period

- Full-time status calculations for variable hour and seasonal employees during a defined admin period

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  • 1. What You Need to Know About the Affordable Care Act and How Workforce Management Can Help October 24, 2013 | Presented by Bob Clements and Amy Kozleuchar ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved.
  • 2. Today’s Speakers Bob Clements Senior Vice President, Axsium Group Email: bclements@axsiumgroup.com Twitter: @robert_clements Amy Kozleuchar Senior Manager, Axsium Group Email: akozleuchar@axsiumgroup.com ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved.
  • 3. Healthcare Reform = Shifting Sands $2,000 per employee penalty has been delayed until January 1, 2015 Rollout of existing provisions has been bumpy and government continues to clarify rules Employers have to act and are acting, but need to be agile to respond to changing requirements ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved.
  • 4. Our Objectives Define full-time employment Explain the safe harbor processes for calculating full-time status Discuss tools that will help determining the full-time status of your employees ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved.
  • 5. Determining Full-time Status is Not as Easy as You Think  hours of service per week (or 130 hours of service per month) ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved. Each hour paid or entitled to payment for:  duties performed  vacation  holiday  illness  incapacity/disability  layoff  jury duty  military duty  leave of absence
  • 6. Understanding the Basic Safe Harbor Process Measurement Period • Between three and 12 consecutive months (employer’s discretion) • • • A period of time an employer uses to determine the full-time status of its employees • Stability Period Administrative Period An optional period of time an employer may use to determine full-time status and notify and enroll eligible employees • • May be referred to as lookback period, standard measurement period or initial measurement period May last up to 90 days Overlaps with prior stability period to avoid gaps in healthcare coverage Not all employees need to follow the same cycle. Employers can use different period lengths for different categories of employees. • • At least six months and no shorter than the measurement period • The period of time during which an employee is treated as full-time (or not) eligibility during pervious measurement period. Period lengths cannot be changed until a new cycle (the measurement period) starts. This process repeats and overlaps in perpetuity. ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved.
  • 7. Our Scenario for Today Party Shop 1. Party supply retailer with more than 12,000 employees 2. Headquartered in Miami, Florida 3. 100 employees at corporate 4. 250 stores across southeast 5. Each store has 50 employees year-round and hires seasonal staff the holiday season 6. Salaried and hourly staff 7. Distribution Center in Georgia employs 50 people 8. Manufacturing facility in Texas has 100 employees ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved.
  • 8. Party Shop’s Safe Harbor Parameters Measurement Administrative Stability Florida, Georgia, North Carolina, South Carolina 6 mo. 1 mo. 6 mo. Texas 12 mo. 1 mo. 12 mo. Initial Measurement Period Start on June 1, 2013 ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved.
  • 9. Party Shop’s Plans Comply with IRS Rules  Measurement periods are not less than three months and not greater than 12 months  ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved. Administrative periods are not more than 90 days and these periods overlap the previous stability period  Stability periods are at least six months and are not shorter than the measurement period
  • 10. Party Shop’s Plans Comply with IRS Rules 2013 F M A M J J 2014 A S O N D J F M A M J J 2015 A S O N D J F M A M J J 2016 A S O N D J F M A M J J A S O N D Hired on 3/3 and initial measurement period begins Transitions to on-going employee when next standard measurement period begins  Measurement periods are not less than three months and not greater than 12 months  ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved. Administrative periods are not more than 90 days and these periods overlap the previous stability period  Stability periods are at least six months and are not shorter than the measurement period J
  • 11. Calculating Hours of Service in the First 6-month Cycle Beth is an hourly employee in the Florida corporate office. During the 6/1/2013-11/30/2013 measurement period: Jeff is an hourly employee in a Georgia store. During the 6/1/2013-11/30/2013 measurement period: • Beth worked 932 hours • Jeff worked 719 hours • Beth took 40 hours of paid time off (vacation) • Jeff was called for jury duty two days and received 16 hours of jury duty pay • (932 + 40) / 26 = 37.38 average hours per week • Beth is considered full-time for the stability period 1/1/2014-6/30/2014 ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved. • (719 + 16) / 26 = 28.26 average hours per week • Jeff is not considered full-time for the stability period 1/1/2014-6/30/2014
  • 12. Calculating Hours of Service in the First 12-month Cycle Lisa is an hourly employee in the Texas manufacturing facility. During the 6/1/2013-5/30/2014 measurement period: Dan is an hourly employee in the Texas manufacturing facility. During the 6/1/2013-5/30/2014 measurement period: • Lisa worked 1,502 hours • Dan worked 1,759 hours • Lisa took 20 hours of paid time off (sick) • Dan took 80 hours of paid time off (vacation) • (1502 + 20) / 52 = 29.26 average hours per week • (1759 + 80) / 52 = 35.36 average hours per week • Lisa is not considered full-time for the stability period 7/1/2014-6/30/2015 • Dan is considered full-time for the stability period 7/1/2014-6/30/2015 ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved.
  • 13. Confirming Hours of Service in Subsequent 6-mo. Cycles Beth is an hourly employee in the Florida corporate office. During the 12/1/2013-5/30/2014 measurement period: • Beth worked 756 hours Jeff is an hourly employee in a Georgia store. During the 12/1/2013-5/30/2014 measurement period: • Beth took 16 hours of paid time off (sick) • Jeff worked 980 hours and he did not have any paid time off during this measurement period • (756 + 16) / 26 = 29.69 average hours per week • 980 / 26 = 37.69 average hours per week • Beth was previously full-time, but based on this measurement period she is not considered full-time for the next stability period. • Jeff was previously not considered full-time, but he will be considered full-time for the next stability period ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved.
  • 14. Verifying Hours of Service in Subsequent 12-mo. Cycles Lisa is an hourly employee in the Texas manufacturing facility. During the 6/1/2014-5/30/2015 measurement period: Dan is an hourly employee in the Texas manufacturing facility. During the 6/1/2014-5/30/2015 measurement period: • Lisa worked 1502 hours • Dan worked 1343 hours • Lisa took 60 hours of paid time off (vacation) • Dan took 12 weeks of FMLA leave • (1502 + 60) / 52 = 30.03 average hours per week • 1343 / 40 = 33.57 average hours per week • Though previously not considered full-time, Lisa will be considered full-time ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved. • Even though Dan was on unpaid leave during this measurement period, it does not count in his average hours. Dan is considered full-time
  • 15. Determining Eligibility for a New Hire in 6-month Cycle Logan is a newly hired hourly employee, expected to work more than 30 hours per week for Store #12. 2014 2013 J J A S O N D J F M A M J 2015 J A S O N Hired on 2/5 Completed 30 days of service on 3/7 Initial coverage period begins on 4/1 Reassessed with 6/1-11/30 measurement period ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved. D J F M A M
  • 16. Establishing Status for a New Hire with 6-month Cycle Colby is a recently hired at Store #37 and is expecting to work between 10 and 37 hours per week. 2014 2013 J J A S O N D J F M A M J 2015 J A S O Hired on 2/5 Initial measurement period Reassessed with 6/1-11/30 measurement period ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved. N D J F M A M
  • 17. Calculating Average Hours for a New Hire with 12-mo Cycle Allison is a new hire and expected to work 20-40 hours per week in the Texas manufacturing facility. 2013 J J 2014 A S O N D J F M A M J J 2015 A S O N D J F M A M J Hired on 2/5 Initial measurement period Reassessed with 6/1-5/31 measurement period ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved. J 2016 A S O N D J F M A M J J 2017 A S O N D J F M A M
  • 18. Finding the Data to Establish Full-Time Status What is the best source of data for hours of service? (Payroll, Time Keeping/Workforce Management, HR, or Data Warehouse?) Best Practice #1: Establish repeatable process for retrieving and calculating full-time status Best Practice #2: Ensure process is flexible, allowing for changes in IRS definitions ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved.
  • 19. Using “Guardrails” for Consistency, Compliance and Cost Two challenges: 1. Prevent “fulltime drift” 2. Maximize fulltime hours Best practices to address these challenges: • Use automated scheduling system to generate schedules • Constrain schedule edits to drive good practices • Establish flash reports, exception reporting and alerts to identify potential issues before they occur ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved.
  • 20. Resources to Help You • Internal Revenue Code 4980H. Shared responsibility for employers regarding health coverage. • http://www.gpo.gov/fdsys/pkg/USCODE-2011-title26/pdf/USCODE-2011-title26subtitleD-chap43-sec4980H.pdf • IRS Notice 2011-36. Request for Comments on Shared Responsibility for Employers Regarding Health Coverage (Section 4980H) • http://www.irs.gov/pub/irs-drop/n-11-36.pdf • IRS Notice 2012-17. Frequently Asked Questions from Employers Regarding Automatic Enrollment, Employer Shared Responsibility and Waiting Periods • http://www.irs.gov/pub/irs-drop/n-12-17.pdf • IRS Notice 2012-58. Determining Full-Time Employees for Purposes of Shared Responsibility for Employers Regarding Health Coverage • http://www.irs.gov/pub/irs-drop/n-12-58.pdf • IRS Notice 2012-59. Guidance on 90-day Waiting Period Limitation Under Public Health Service Act • http://www.irs.gov/pub/irs-drop/n-12-59.pdf • Continuing to Implement the ACA in a Careful, Thoughtful Manner • ©2013 Axsium Group, a division of Knightsbridge Human Capital Management Inc. All rights reserved. http://www.treasury.gov/connect/blog/Pages/Continuing-to-Implement-the-ACAin-a-Careful-Thoughtful-Manner-.aspx
  • 21. Human Capital Management Your largest asset … your largest opportunity for competitive advantage Copyright © 2012. Infor. All Rights Reserved. www.infor.com 21
  • 22. 5 Ws of HCM Shifts Workforce Geographical Allocation Skillsets Payroll Attract, retain, develop, promote the right workforce to flexibly meet business goals Copyright © 2012. Infor. All Rights Reserved. www.infor.com 22
  • 23. Key to a Solid HCM Strategy Transform the way people and organizations perform and unify any content, process, software, service and device … to raise Return on Capability Copyright © 2012. Infor. All Rights Reserved. www.infor.com 23
  • 24. For More Information • For a free ROI calculation, copy of today’s slides, recording link, pricing or additional product information: Look for email next 24 hours from wcook@enwisen-hr.com to make request • Upcoming webinars and events: www.enwisen.com and infor.com • • • • • • • • Brandon Hall: Innovative technologies changing healthcare – Oct 29 FedEx delivers better employee experience through Shared Services – Oct 30 CedarCrestone – Annual HR Technology Survey results – Nov 5 HR.com – Performance Management – Nov. 20 Evanta HR Leadership Summit Washington DC – Nov. 21 HR.com – How to survive and pass a labor audit – Dec 5 HR.com – Workforce Management – Dec 6 HR.com – Talent Management – Dec 12 Copyright © 2012. Infor. All Rights Reserved. www.infor.com 24
  • 25. Copyright © 2012. Infor. All Rights Reserved. www.infor.com 25