Review the agenda.What do these numbers represent in regards to the ACA?They are all part of the mandatory provisions under the Affordable Care Act and if not adhered to correctly, may result in fines and penalties, impacting organizations’ bottom line.Now that Health Care Reform is here to stay, employers are tasked with looking ahead to the looming requirements and deadlines of the Affordable Care Act (ACA).ACA Differs From All Preceding Benefit LegislationACA impact goes far beyond benefitsIT/SystemsFinanceLegalWorkforce planningCompensation/Reward strategyBusiness model Employers with at least 50 full-time employees (FT Employees), including full-time equivalent employees (FTEs), will be required to pay a penalty if they fail to offer minimum essential coverage and a full-time employee obtains subsidized coverage from a Marketplace/Exchange. *An Employer with fewer than 50 aggregated FT Employees and FTEs is not considered a "large employer" and is not subject to the shared responsibility requirements. An employer may be subject to a penalty even if it decides to play because the coverage the employer offers is either unaffordable (costs the employee more than 9.5% of his household income) or it does not provide minimal actuarial value (the plan is not designed to pay, on average, at least 60% of participants’ covered medical expenses), OR the employee who receives a subsidy is one of those employees who was somehow missed and was not within the "substantially all" employees who were offered coverage (he/she fell into the 5%) and was, therefore, forced to obtain coverage on a Marketplace/Exchange.Employers have only 90 days to offer eligible employees health care benefits
Review the agenda.As organizations are trying to figure out their strategy, it will require a balance of:Costs – What are the hard costs of providing healthcare benefits versus paying penalties?Service – How can I maintain the level of service my customers expect?Retention – How might my decision impact the retention of my best employees, and recruitment of new employees?PR – How might a decision on my ACA implementation decision be perceived by my employees and customers?So, 3 things you will remember after this presentation are: (Read from the screen).
Workforce planning is all about scheduling employees more efficiently and with greater cost-effectiveness, which is what all employers will need in order to manage the requirements of the ACA.
ADP can provide workforce planning reports:enabling managers to make real-time adjustments to schedules to reduce costs without sacrificing productivity or customer service levels.Employers can use Average Total Paid Hours to take immediate action when employees reach specified thresholds One Key Benefit:Detailed report data on total hours for each employee to use in the determination of full time equivalency qualification for ACA
Having workforce planning enables companies to be far more agile in their ability to ensure that the right person is at the right place at the right time (and at the right cost) to optimize their business opportunity.
Provides real-time visibility into total hours of service (worked and non-worked hours) so you can monitor part-time employees that exceed the 30 hour per week and take proactive steps to adjust work schedules to prevent benefit eligibility.Web-based scheduling tool makes it easier to be proactive in adjusting schedules on a weekly basis to prevent part-time employees from exceeding 30 hours per week. For employers, it’s not a question about whether you have to comply with the ACA, but more about controlling your ACA liability. For part-timers, contract workers and seasonal hires. ADP’s integrated human capital management solution will enable you to be proactive in monitoring the hours and schedules of these part-time workers and make timely adjustments where appropriate to minimize your ACA liability.Align labor with demand to minimize costs
What it boils down to is that employers must start tracking now (for at least 6 months in 2013) which of their employees are full-time (based on 30 hours of service per week or 130 hours of service per month); which of their employees are part-time and the number of hours worked; and which of their employees are seasonal and for how many days/months those employees work for the employer throughout the year.
Review the agenda.How ADP Simplifies Your JobAutomated process for determining look-back periodAbility to be more generous in the letter of the law to minimize potential penalties if they are not as confident about their dataAccurate collection, tracking and audit of service hours needed to evaluate and determine eligibility Health Care Reform regulations require integration of HR, Payroll and Time & Attendance. ADP’s solution provides integration, tracking and reporting. Employees that exceed the averages during “look back period” will be benefit-eligible going forward. Penalty could occur if employee is not covered, and receive federal coverage through a Marketplace/Exchange. However, allowing over 30/130 hours increases labor costs.HR and Operations departments will need to work together to form a strategy. TLM Technology will be key to monitor actual vs. scheduled. Employers should be encouraged to track all employees in Time & Attendance.
Review the agenda.Provides individual view of each employee’s ACA Benefits Status and average hours paid.
Review the agenda.This Eligibility report provides information on individual employee eligibility for benefit plan classes within a plan subtype. You can view the options available for your employees and who have enrolled for the benefit plans and who have not; you can notify your employees to enroll for the plans they are eligible for.Key Benefits:Comprehensive report list of employees who meet eligibility requirements
Why It’s Important to YOU and Your business: (Read from the screen) and you can include:Ability to modify employee schedules allows managers to minimize costs without compromising productivity and serviceProvides individual view of each employee’s ACA Benefits status and average hours paidProvides information to help you comply with government labor reporting requirements
Employers need to evaluate the requirements and costs of providing coverage to full-time employees and then make the decision as to whether they are going to “PLAY” or “PAY”. Even if an ER decides to PLAY, they could still be subject to penalties if their coverage is not affordable and does not provide minimum value. Let’s review both criteria.If an employer either (A) fails to offer healthcare coverage to at least 95% of its full-time employees, or (B) offers healthcare coverage that does not satisfy certain minimum value and affordability requirements, then it may be subject to a Shared Responsibility Penalty if one of those full-time employees to whom the employer did not offer coverage (or to whom the employer offered coverage that was not “affordable” or of “minimum value” goes to a Marketplace/ Exchange and receives a premium tax subsidy to help pay for the coverage for himself or herself. Minimum value means that a plan must pay at least 60% of covered expenses.
Review the agenda.An employer plan is unaffordable if the full-time employee’s required contribution exceeds 9.5% of the taxpayer’s household income for the taxable yearThe employer may calculate affordability using the full-time employee’s W-2, box 1 wages, or another available safe harbor, such as Rate of Pay or Federal Poverty Level. Affordability is based on the cost of self-only coverage, even if the employee elects family coverage.
Aids compliance with W-2 requirementsReducesrisk of penalties for incorrect W-2s (i.e., $50 per)Reduces administrative burden of year-end payroll processing and validation
Review the agenda.As for determining if an Employers’ plans provide minimum value, they must be designed to pay on average, at least 60% of participants’ covered medical expenses; equal to a bronze level plan on a Marketplace/Exchange.
Mitigates risk of employee’s benefit costs exceeding 9.5% of employee only coverageEnsures all employees are able to enroll in a minimum essential coverage planAidsin evaluating affordability and minimizes potential penalties to employer if employee goes to a Marketplace/ExchangeWhile making decisions as to the provisions of Shared responsibility under the ACA, employers need to consider the economic demographics of their employee population and what impact that will have on the affordability of the coverage they offer.
Managing enrollment of eligible employees requires a proactive strategy otherwise as an ER you could be exposed to penalties or fines. It involves offering enrollment opportunities to eligible employees, not imposing waiting periods longer than 90 days and tracking employee decisions to waive or opt out of ER offered coverage and termination when employees are no longer eligible.This places a huge administrative burden on employers as they try to mitigate penalties.
Review the agenda.Employers need to have tracking and auditing capabilities to show reasons for employees opting out of their ER’s provided coverage.Also, ER’s need to be thinking about how they will handle exchange inquiries from employees and how this will be communicated to them.
Review the agenda.Play or Pay Preparation report helps employers mitigates risk related to cost of benefits and employee burden levels; aidscompliance regardless of company size; andreduces administrative burden in determining wage levels.
Review the agenda.Employee Enrollment Report - This report provides information on employees' benefit plan enrollments. It includes plan name & coverage levelKey Benefit:Comprehensive report with employees’ plan enrollment details; including deduction information, coverage level, and dependents and beneficiary enrollmentsEmployee and Dependent Enrollment Report - This report provides information regarding employee and their dependents' benefit enrollments. It includes dependents' enrollments, age limit, overage dependents details etc.Key Benefit:Comprehensive report with employee and dependent plan enrollments; including auditing data like age limit and overage dependent details
Review the agenda.Prospective clients can leverage the Enrollment Profile report to determine what status a person is in so they do not go past the admin period without taking some type of action.
Why it’s important for employers (read from the screen) It also helps mitigate excessive costs based on employment status when employers have the right tools for preparation and auditing.
Managing compliance in a changing environment is a challenge for all Employers. In Fact, CFO Research in January 2013 surveyed finance executives and found that nearly 90% of Senior Finance Executives rank compliance as a priority in their organizations. And having data analytics and reporting capabilities to spot trends or detect issues before they become escalated problems is critical in this constantly changing marketplace.
Review the agenda.W-2 Detail Report - This report provides additional details of employer and employee contribution towards various benefit plans. These details are useful to find out how the total group health insurance costs of an employee reported in the W-2 form was calculated. Total costs is the amount that will appear on the W-2 in box 12DD. Key Benefit:Analysis data showing what the ER and EE are paying for benefits and ensuring the data that appears on the W-2 is accurate.
Review the agenda.Client has the ability to run this report for ALL employees – meaning those only who are participating in a medical plan or only those not participating.This report displays which employee is participating in a benefit plan and who is not, with the reasons for waiving plan participation. The report also displays which employee and their dependents are covered by benefits and which ones are not, along with identified reasons for not participating in a plan. Key Benefits:Comprehensive Enrollment Details on Employees & DependentsWaive Coverage Effective Date & Reason
Review the agenda.This report provides the detailed information on fees owed by each benefit plan provider towards the Patient-Centered Outcomes Research. The report displays the report period and research fees applicable for that period, benefit plan providers, calculation of the fees, and total amount owed by each provider.Federal government is starting a fund to assist people with assessing the effectiveness of research, hospitals, doctors, etc. Begins to apply to plan and policy years ending after September 23, 2012 – September 30, 2019. Sponsors of self insured accident or health plans will be assessed a federal tax under the policy. Clients will need to track plan and enrollment information including health provider and annual assessed fee for accident or health plans. Identifies Patient-Centered Outcomes Research Fees that can be validated and expenses budgeted for in advanceGenerates a Patient-Centered Outcomes Research Fee reportFor self administered plans this provides a means to calculate this feeFor non-self administered plans this provides the means to audit providersSponsors of plans will be assessed a federal tax to examine the effectiveness of hospitals and doctorsAidscompliance with research fee requirementsReducesadministrative burden of calculating or auditing research fees
Tip: Best to position standard reports as tools to help clients predict and measure the impact of ACAHaving auditing and reporting capabilities also reducesadministrative burden of communicating Marketplace/Exchange options to employees under the ACA mandates ; ultimately providingrequired information in a timely manner.
ADP not only provides guidance and tools to minimize risk associated with Shared responsibility, we cover additional provisions impacting employers under the Affordable Care Act.Suggestion: Speak to the breadth and depth of compliance assistance we provide to ERs.
Why It’s Important (read from the screen)Also, it improves accuracy and saves time by eliminating multiple systems and spreadsheets that many organizations leverage in their benefits administration and human capital management processes – this will result in increased efficiency and effectiveness
Why It’s Important(read from the screen).Also, role of employer-provided health insurance and communicating requirements and changes to employees will impact attracting and retaining talent needed to build a competitive workforce.Improves employee satisfaction, engagement and productivity with convenient access to company communications, personal and benefit information
Empowering an employer’s workforce also allows for a reallocation of resources (and human capital) that can be directed back into their core business focus.
Aids compliance with W-2 requirementsReduces risks of penalties for incorrect W-2sReduce administrative burden of year-end payroll processing and validation
Ease Employers into the ACA provisions with record keeping & reporting where analytics, best practices and thought leadership are critical to organizational successEmployers need more visibility to human capital data to make informed, educated business decisionsImplement strategic planning will be vital for employers to evaluate, develop and finalize a strategy for administration, employee communication, compliance, measurement & reporting, here’s where ADP can help.
Why it’s important – having tools and integrated technology to control benefits eligibility will be key in mitigating excessive costs based on employment status;and ultimately reduces the costs of healthcare from ineligible participants in the employer sponsored benefit plans
ADP Offers an Integrated Approach to Manage Workforce Planning and Administration At the foundation, automated time and labor management systems help reduce labor costs and enhance regulatory compliance by automating and documenting time and attendance transactions.But when organizations build on that foundation by integrating time and attendance data with Payroll, HR, Benefits and Talent Management, they can achievemore significant improvements in worker productivity, employee engagement, and even revenue growth.To effectively and efficiently comply with the ACA, employers need a systemthat Automate beyond core payroll and benefits to achieve results in order to provide a seamlessly integrated solutionWorkforce 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 assigned in conjunction with liability for health care costsDatabase of record Payroll tracks actual hours worked Payroll send automated trigger to benefit administration system when employee exceeds 130 hours per monthBenefits administration Employee eligibility calculation is triggered Appropriate look-back and coverage period rules are applied Employee is notified of eligibility – avoiding penaltyReporting and reconciliation Federal and state reporting Reconciliation with penalty assessmentscan integrate payroll, time management and benefits administration
ADP maintains a staff of dedicated professionals (Nationals is saying over 1500 people….)who carefully monitor federal and state legislative requirements affecting human resource, payroll, tax and benefits administration to ensure that are systems-ready to implement changes on a timely basis and as relevant laws evolve.ADP is uniquely positioned to help guide companies through this complex change; not only to comply with the ACA, but to see the opportunities it presents to better manage their own people.In the recent changes, all of our systems and clients were updated with the new tax changes within 48 hours of the approval of the measure. We were the first provider to notify our clients of the impact of new tax changes, including ACA-related changes. All competitors were silent while we were educating our clients.ADP’s Eye on Washington regulatory alerts provides timely updates once legislation is officially passed. We focus on high impact/high visibility events and topics that impact employers and provide action-items that you should focus on.
Navigating the Pillars of
the Affordable Care Act
Employers with at least 50 full-time employees will be
required to pay a penalty if they fail to offer minimum
essential coverage & a full-time employee obtains
subsidized coverage from an exchange
Employers may be subject to a penalty if it decides to
play because the coverage offered is either “unaffordable”
or the plan is not designed to pay at least 60% of
participants’ covered medical expenses
90 Employers have only 90 days to offer eligible employees
health care benefits
What Do These Numbers Represent?
Three Things You Will Remember
! WHY IT’S IMPORTANT TO YOU
+ HOW ADP CAN HELP
? WHAT IS THE BUSINESS ISSUE?
Ability to categorize workforce
and establish measurement/look-
back periods to meet your
Provides automation of
measurement periods. This
Standard, Administrative, &
Stability periods for multiple
CAN HELP+Eligibility Tools
Ability to pull total hours for
each employee to use in the
determination of full time
Provides ACA Benefit Status
with the option to “Change”
if they are not confident in
CAN HELP+Eligibility Tools
Provides ACA Benefit Status with
the option to “Change” if they are
not confident in their calculations.
CAN HELP+Eligibility Tools
Eligibility Report provides an
easy way to look at employee
base as a whole and identify
who has reached eligibility
Allows employees to opt
out of medical plan with
required reason to ensure
employer has appropriate
tracking and auditing tools
CAN HELP+Enrollment Tools
CAN HELP+Enrollment Tools
Provides tools to assist with
the annual reconciliation of
the penalty bill against
benefits and W-2 data,
enabling client to request
W-2 corrections or initiate
penalty appeals process
CAN HELP+Enrollment Tools
with employee and
auditing data like age
limit and overage
Provides proactive report to
show employee enrollment
status ensuring Employers
take action during their
CAN HELP+Enrollment Tools
CAN HELP+Standard Compliance Reports
Group Health Insurance
Costs reporting is available
to generate and review the
costs associated with each
employee by benefit plan
on employees &
Play or Pay Preparation Report
ADP provides Practitioners with
self administered plans the means
to calculate the research fee
Patient –Centered Outcomes
Research Fee Report
Research Fee report provides
the detailed information on
fees owed by each benefit plan
provider towards the Patient-
Centered Outcomes Research
Time and Labor
• Report on Hours of Service
including Projected Scheduled
• View & Adjust Work Schedules
• Ability to Set Threshold
Notification for Total Hours of
Service (January 2014)
• Full – Time Status Reporting
• Auto-enrollment Required in 2015
• Enrollment of Eligible Employees
• Coverage Termination
• W-2 Affordability Calculation
• Data to/from Exchanges
• Reporting to Federal Government
• Reconcile Penalties Levied for
• Deductions and Other Earnings
• W-2 Earnings
• System of Record for Hours
• Look Back Approach
EMPLOYERS Need an Integrated Approach
to Manage the ACA