PeopleMatter: What ACA Means for the Retail and Service Industries Webinar
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Watch Yvonne Frame, Client Executive at Marsh & McLennan Agency and Nancy Sansom, VP-Marketing at PeopleMatter to learn how the Affordable Care Act will impact the multi-location service industry. Whether you are in foodservice, hospitality or retail, changes are fast approaching in 2014 that will affect you. You won’t want to miss out on this free webinar to learn: - What’s actually in – and not in - the Affordable Care Act - The difference between a 29er and 49er - Key rules to be aware of when you have multiple locations -How PeopleMatter can help keep your labor and benefit costs under control
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PeopleMatter: What ACA Means for the Retail and Service Industries Webinar
- 1. What the ACA Means for the Retail and Service Industries! July 18, 2013! Tips & Tricks for Staying Profitable Under the Affordable Care Act! and! ®
- 2. Yvonne Frame, CEBS! Client Executive! Marsh and McLennan Agency! Nancy Sansom! Senior VP of Marketing! PeopleMatter!
- 3. Overview! Insurance Exchanges! Employer Mandate! Controlled Groups! “Pay” or “Play” Strategies!$ / Workforce Management Impact! Agenda!
- 4. Overview!
- 5. In place requirements!• Maintain compliance with existing provisions! • Grandfathered (GF) plans must:! • Annually monitor degree of changes against requirements! • Fulfill annual notification requirements! Overview!
- 6. In place requirements!• Maintain compliance with existing provisions! • Grandfathered (GF) plans must:! • Annually monitor degree of changes against requirements! • Fulfill annual notification requirements! • Plans losing GF status must:! • Implement non-GF status requirements ! • 100% preventive care coverage! • Appeals processes! • Provider selection/referral rules! • Out of network employer coverage! Overview!
- 7. 2012—2013! continue to implement:! • Summaries of Benefits and Coverage! • W-2 reporting! • $2,500 health care FSA limit! • Coverage of additional women’s preventive care! • Effectiveness research fees! • Medicare tax increase for high earners! • Medicare retiree Rx subsidy elimination! • Medical loss ratio rebate distribution (insured plans)! • Exchange notifications for employees! Overview!
- 8. 2014 and beyond ! develop strategies for:! • Individual mandate! • Employer mandate (2015)! • Health insurance exchanges & Medicaid expansion! • 90-day waiting period limit! • New health plan fees! • Required notices & reporting! • No essential benefit or ! pre-ex limits! ! • Limits on out of network (Non- GF) & deductible (Non-GF small group)! • Coverage for clinical trial- related services (Non-GF)! • Insured non-discrimination rules (date?)! • Cadillac tax (2018)! • Auto-enrollment (date?)! Overview!
- 9. October 1, 2013! July 31, 2013! January 1, 2014! Upcoming Important Dates! January 1, 2015 ! Overview! • Employers must distribute Marketplace notices by this date! • Marketplace opens! • PCORI fee due, including HRA plans! • Marketplace coverage is effective! • Individual mandate in effect! • Employer mandate in effect!
- 10. July 2nd Update! Overview! • Requirement to offer coverage to full-time employees ! • Minimum value requirement for coverage offered! • Affordable contribution requirement! • Employer information reporting to IRS! What was delayed to January 1, 2015?! January 1, 2015 ! • Employer mandate in effect!
- 11. July 2nd Update! January 1, 2015 ! Overview! • Employer mandate in effect! • Insurance marketplaces & expanded Medicaid! • Individual mandate & marketplace subsidies! • 90-day waiting period limit! • PCORI, transitional reinsurance & health insurer fees! • Notice of coverage options & Summary of Benefit Coverage (SBCs) w/ plan value statement! • Various plan changes! • Wellness incentive increase! What was NOT delayed?!
- 13. Public" • State-provided platform for individuals to purchase ! health coverage! • Federal exchange will be set up if state does not by 2014! • Small Business (1–100) can purchase exchange coverage! • Large Employers (100+) can purchase exchange coverage in 2017! Private" • Marketplace with health only or core and supplemental product offerings across many benefits and services! • Exchange sponsor stock products and manages end-to-end consumer experience! Insurance Exchanges! Pu! Pr!
- 14. Insurance Exchanges! Default to Federal Exchange (26)! Declared State-based Exchange (18)! Planning for Partnership Exchange (7)! Source: Kaiser Family Foundation http://www.statehealthfacts.org/comparemaptable.jsp?ind=962&cat=17, accessed 3/11/2013! IL NY PA NJ DE MD WV MT WA ID OR TX ND MN WI MI VA NC SC GA FL ALMS LA NM AZ WY SD NE CO KS OK IA MO AR IN KY TN HI AK CA NV UT ME NH VT CT RI MA DC OH
- 15. Employer Mandate! Now Effective in January 2015!
- 16. If no employer plan is offered and 1 or more Full-Time (FT) employee receives the exchange coverage tax credit subsidy, employer pays penalty of $2,000/FT employee (first 30 FT employees excluded from penalty)! If employer plan is offered but is offered to less than 95% of FT employees or is not offered to employees’ children, rules outlined above apply. ! If coverage is offered to 95%+ of FT employees and children but is “insufficient” or “unaffordable” and 1 or more FT employee receives the exchange coverage tax credit subsidy, employer pays penalty of $3,000/FT employee receiving subsidy (or $2,000 per FT employee, if less)! Pay!$ Play! or! Employer Mandate!
- 17. How do you determine group size? Beginning in 2015, companies with more than 50 Full-Time Equivalent (FTE) employees are subject to the Pay or Play mandates/penalties.! Group Size! FTE (>30 hrs/week)! 23! PT Employees (Aggregate Hours ! worked per month / 120)! 3,800/120 = 23! 23 + 23 = 46! Employer Mandate!
- 18. “Look Back” Period! 3 –12 months (you choose)! Admin. Period! up to 90 days! Standard Stability Period! no less than 6 months or length of ! “Look Back” period! How do you determine full-time status of part-time and seasonal workers?! If employee averages 30+ hours/ week during measurement period, employee must be considered full- time for subsequent stability period; if not, employee will be considered not full-time for the stability period! Employer may use administrative period up to 90 days between look back and stability periods to conduct enrollment! Employer may choose a look-back measurement period of 3 to 12 months and a stability period of no less than 6 months or the length of the measurement period, if greater! Employer Mandate!
- 19. Pay!$! Play! – Penalties! – Compensation increases due to loss of benefits?! – Auto Enrollment! – Individual Mandate! – Expanded eligibility! – Medicaid expansion! Employer Mandate! or!
- 21. The entire Controlled Group is considered for application of ! the Pay or Play rules! Rule 1! Controlled Groups! 1! B Corp.! 10 FTEs! A Corp.! 3 FTEs! C Corp.! 25 FTEs! D Corp.! 35 FTEs! With over 50 FTEsin the ControlledGroup, Pay or Playapplies! 80% ownership! 80% ownership!80% ownership!
- 22. If the entire Controlled Group has over 50 FTEs, the “Pay” penalty applies to each entity separately. ! Rule 2a!2! $2,000! $8,000! $22,000! $34,000! Penalty! x $2,000! $66,000! A Corp.! B Corp.! C Corp.! D Corp.! 1! 7! 22! 33! FT Employees! 0! 3! 11! 16! FT Credit! 63! 30!Total! 1! 4! 11! 17! Net FT Employees! 33! =! =! =! =! Controlled Groups!
- 23. If the entire Controlled Group has over 50 FTEs, the “Play” penalty applies to each entity separately. ! C Corp.! 0 FT EEs receives subsidized exchange coverage! D Corp.! 7 FT EEs receives subsidized exchange coverage = $21,000! B Corp.! 7 FT EEs receives subsidized exchange coverage = $3,000! A Corp.! 0 FT EEs receives subsidized exchange coverage! Controlled Groups! Rule 2b!2!
- 24. “Pay” or “Play” Strategies!$ /
- 25. Pay or Play Strategies! Determine health benefits not key to retention/ recruitment! Pay! $! $2,000 penalty on all FT employees (minus 1st 30)! Pay adjustment! to keep employees whole! Determine health benefits matter! Play! Engage employees to manage health! Aggressively manage plan on a long term basis! You first should decide how important offering competitive healthcare benefits is to your business – and if it is important, then decide how to effectively manage annual employer costs! $ /
- 26. Employers Likely Actions Regarding Employees Working 30+ Hrs/Week! 6% 18% 32% 45% Make all employees working 30+ hours/week eligible for full-time employee plan(s)! Make no change and pay penalty as necessary! Add a lower-cost plan for employees that work fewer than 40 hours/week! Change workforce strategy so that fewer employees work 30+ hours/week! Pay or Play Strategies!$ / Source: Mercer Survey of Employer-Sponsored Health Plans 2011!
- 27. Health management Implement results-driven population health management program! Offset cost increases Increase dependent tier contributions to offset cost increases resulting from single tier contribution reduction and new opt-ins due to individual mandate! Salary-based contribution Create salary-based contribution, i.e. lower contributions only for those potentially eligible for penalty-generating subsidies (income below 400% of FPL)! Value plans Offer a 60% value plan and position current plan as a buy-up option! Decrease staff levels! Decrease number of staff working 30+ hours per week (reduce hours of those currently working just over 30 hrs/week)! Alternative funding Consider alternative funding options (e.g., ASO, level funding, captives, etc.)! Pay or Play Strategies!$ /
- 28. Create additional classes for employees working between 30 & current FTE level that are FT health care only! Monitor employees that are expected to work less than 30 hours/week! Under ACA some of labor pool and part time employees will be considered FTEs for health insurance in 2015! Strategies! Pay or Play Strategies!$ / Reset status for full-time employees to 30 hours per week!
- 30. Employers Likely Actions Regarding Employees Working 30+ Hrs/Week! 6% 18% 32% 45% Make all employees working 30+ hours/week eligible for full-time employee plan(s)! Make no change and pay penalty as necessary! Add a lower-cost plan for employees that work fewer than 40 hours/week! Change workforce strategy so that fewer employees work 30+ hours/week! Source: Mercer Survey of Employer-Sponsored Health Plans 2011! Workforce Management Impact!
- 31. Workforce Management Impact! Employees @ ! 40 hrs / week!300! 38% ! Increase in people to hire, train and schedule! Employees @ ! 29 hrs / week!414! How many more workers do I have to manage if I keep my employees working less than 30 hours per week? ! Part-Time Workforce! How many more workers?
- 32. • Find and evaluate more people! • Interview more people! • Perform more background/drug/ motor vehicle checks! ! ! More Hiring! • Manage more I-9s! • File more tax credit paperwork! • Complete more orientation sessions! • Complete more new hire paperwork and other tasks! More Onboarding! 38%+" Workforce Management Impact!
- 33. Hourly Employee Turnover" $1,000 - $2,500 per employee! Hourly Employee! Replacement Cost! Workforce Management Impact!
- 41. • More people to train on process changes, product line changes, etc.! • Difficulty keeping the attention of workers with multiple jobs! ! ! More Ongoing Training! 38%+" Workforce Management Impact! More Onboarding. . . ! More Hiring. . . !
- 43. • More time-off requests! • Shift changes and swaps! • Increased complexity in worker availability! More Scheduling Tasks! 38%+" Workforce Management Impact! More Ongoing Training. . . ! More Onboarding. . . ! More Hiring. . . !
- 44. SSCHEDULE
- 46. Create additional classes for employees working between 30 & current FTE level that are FT health care only! Reset status for full-time employees to 30 hours per week! Monitor employees that are expected to work less than 30 hours/week! Under ACA some of labor pool and part time employees will be considered FTEs for health insurance in 2015! Strategies! Workforce Management Impact!
- 47. “Look Back” Period! 3 –12 months (you choose)! Admin. Period! up to 90 days! Standard Stability Period! no less than 6 months or length of ! “Look Back” period! How do you determine full-time status of part-time and seasonal workers?! If employee averages 30+ hours/ week during measurement period, employee must be considered full- time for subsequent stability period; if not, employee will be considered not full-time for the stability period! Employer may use administrative period up to 90 days between look back and stability periods to conduct enrollment! Employer may choose a look-back measurement period of 3 to 12 months and a stability period of no less than 6 months or the length of the measurement period, if greater! Workforce Management Impact!
- 53. What the ACA Means for the Retail and Service Industries! Q&A! and! ®
- 54. What the ACA Means for the Retail and Service Industries" July 18, 2013" Tips & Tricks for Staying Profitable Under the Affordable Care Act" and" ®