This document provides an overview of the Affordable Care Act (ACA) and strategies for managing its requirements related to payroll, HR, and benefits administration. It discusses key ACA provisions such as applicable large employer calculations, health insurance marketplace notices, and reporting requirements. It also outlines three strategies for complying with the ACA using an integrated payroll, HR, and benefits administration solution to track employee hours, enrollments, and other necessary data.

1. The Payroll and HR
Technology Toolkit for
Managing the ACA
APS, Inc.• apspayroll.com • Toll Free 888.277.8514 • Fax 318.222.0601

2. Presenters
Christian Valiulis
• Chief Revenue Officer at APS Payroll
• Former Business Development Leader at
Praeses Corporation
• 20+ years experience in Sales, Marketing,
and Business Development
Tracy Maranto-Phillips
• Human Resources Consultant at Querbes &
Nelson
• Former Director of Human Resources at
Centenary College of Louisiana
• 10+ years experience in Human Resources
www.apspayroll.com

3. Disclaimer
All information in this presentation, including the opinions of the presenters, is solely for
illustrative purposes. The information is based on certain assumptions, interpretations,
and calculations that are not necessarily accurate with regard to provisions of the PPACA,
HCERA, HIPAA, COBRA, ERISA, and other rules, regulations, guidance, and all other
documents issued by relevant state and federal agencies with regard to these laws and
any other relevant laws. The information provided should not be considered as legal,
financial, accounting, planning, or tax advice. You should consult your attorneys,
accountants, and other colleagues or experts of this type for advice based on their own
interpretations, calculations, and determinations of applicable laws, rules, regulations,
guidance, and any other documents and information that they determine may be
relevant to your particular situation. The authors make no guarantee or other
representations as to the accuracy or completeness of the data in this presentation.
Automatic Payroll Systems, Inc. and Querbes & Nelson expressly disclaim any liability for
information obtained from use of this presentation by any other person. No warranty of
any kind is given with regard to the contents of this presentation.
www.apspayroll.com

4. What Does It Mean To You?
www.apspayroll.com
2014 2015 Mandate

5. Takeaways
• General understanding of the Patient Protection and
Affordable Care Act (PPACA or ACA)
• Understanding of strategy options and penalties
• Understanding recent guidance on reporting requirements
and the employer mandate
• Applying the provision requirements to workforce
management (Payroll, HR, and Time & Attendance practices)
• How a unified cloud solution can help manage ACA
requirements
www.apspayroll.com

6. Timeline: Focus on 2014
www.apspayroll.com

7. Health Insurance Marketplace
Notices
All employers covered by the Fair Labor Standards Act (FLSA) are required to
provide a notice about the state’s Health Insurance Marketplaces to current
employees by October 1, 2013 and to new employees within 14 days of the
hire date moving forward.
• Employers need to consider the process for providing notices - paper
vs. digital
o If digital, request an eSignature and have a document
management system in place
o Understanding the Interim Policy on Electronic Disclosure Under
29 CFR 2550.404a-5
www.apspayroll.com

8. What is a Large Employer?
A "large employer" is defined as one with more than 50 full-time equivalent employees
during the preceding calendar year.
• Full-time employees are defined as those working 30 or more hours per week
• Full-time excludes season employees who work less than 120 days during the year
• Part-time or variable employees' hours as a group are included in the calculation
SEASONAL: Seasonal retail, agricultural, and others included under good faith reasonable interpretation the
number exceeded 50 for only 120 days/4 months (or fewer).
COMMON CONTROL OWNERSHIP: If you are considered to be a control group, under IRS Control Group Rules,
you may have to combine the employee counts from each company.
DEFINING EMPLOYEE USING THE COMMON LAW DEFINITION: Anyone who performs services for you is your
employee if you can control what will be done and how it will be done. This is so even when you give the
employee freedom of action.
REMEMBER: Per the Fair Labor Standards Act (FLSA), proper employee classifications are IMPORTANT for
calculation and potential audits.
www.apspayroll.com

9. Hours of Service
• Each hour for which an employee is
paid, or entitled to payment, for the
performance of duties for the employer;
AND
• Each hour for which an employee is paid, or entitled to
payment by the employer on account of a period of time
during which no duties are performed due to vacation,
holiday, illness, incapacity (including disability), layoff, jury
duty, military duty or leave of absence
www.apspayroll.com

10. Large Employer Calculation
Example of ACA FTE Report in APS OnLine
www.apspayroll.com
Employers have to determine if they are an applicable large employer and subject
to the provisions of the ACA.
CAVEAT: Seasonal employees must be reviewed by hours of service on a daily basis. If a seasonal
employee worked over 120 hours in a four month period, they would be factored into the calculation.

11. Shared Responsibility Rules for
Applicable Large Employers
• Must offer coverage to full-time
employees and to children under the
age of 26 (excludes spouses)
• Under IRC Section 4980H, must
comply with annual IRS reporting
requirements (50+ employees)
• Employer subsidy required on
employee only premium tier and
must satisfy the following 3-pronged
criteria:
www.apspayroll.com
3-pronged test for
insurance coverage

12. Large Employers Must Offer
Coverage to Whom?
• Any employee averaging 30 hours of
service or more per week in previous
lookback period (3-12 months)
• Any new hire who, after 90 days, is
REASONABLY EXPECTED to work
more than 30 hours per week
www.apspayroll.com
2015

13. Lookback, Stability, and
Administrative Periods
• Lookback period for Large Employer Determination vs. Stability period - there are
different periods
• Variable employees
• Lookback period can be 3-12 months to determine eligibility for variable employees
- employer determines the length of the period
• Stability period should equal the lookback period, but a minimum of 6 months (i.e.
3 month lookback period, minimum 6 months stability)
• Administrative period - 90 days - they have to have insurance within 90 days
(suggestion is a 60 day waiting period)
www.apspayroll.com

14. Compliance Requirements
EMPLOYEE GETS THE SUBSIDY IN THE
MARKETPLACE IF:
• Prong 1: Subsidy Safe Harbors
OR
• Prong 2: Minimum Essential
Coverage (MEC) satisfied
OR
• Prong 3: Minimum Value (MV)
satisfied
www.apspayroll.com

15. The required employee contribution for single coverage
exceeds 9.5% of their household income (Safe Harbors)
Safe Harbors:
1. Pay below 100% federal poverty level (FPL) or pay above
400% of FPL (those earning below 100% FPL and 400% +
are not eligible for subsidy)
2. Pay at 9.5% of lowest wage earner
3. Pay at 9.5% of individual wages
Prong 1 - Subsidy Safe Harbors
www.apspayroll.com

16. Safe Harbor #1
Household Size 100% 200% 400%
1 $11,490 $22,890 $45,960
2 $15,510 $31,020 $62,040
3 $19,530 $39,060 $78,120
4 $23,550 $47,100 $94,200
5 $27,570 $55,140 $110,280
6 $31,590 $63,180 $126,360
7 $35,610 $71,220 $142,440
8 $39,630 $79,260 $158,520
For each additional
person, add
$4,020 $8,040 $16,080
2013 Federal Poverty Level (FPL)
www.apspayroll.com

17. Safe Harbor #2
Hourly Rate Annual Salary Annual Premium 9.5% Wages Annual Ins. Cost
ER Paid
$10.00 $20,800 $6,000 $1,976 $4,024
$20.00 $41,600 $6,000 $1,976 $4,024
$30.00 $62,400 $6,000 $1,976 $4,024
$40.00 $83,200 $6,000 $1,976 $4,024
9.5% Lowest Wage Earner
Employer Cost: $16,096
$500 Employee only Monthly Premium
www.apspayroll.com

18. Safe Harbor #3
Hourly Rate Annual Salary Annual Premium 9.5% Wages Annual Ins. Cost
ER Paid
$10.00 $20,800 $6,000 $1,976 $4,024
$20.00 $41,600 $6,000 $3,952 $2,048
$30.00 $62,400 $6,000 $5,928 $72
$40.00 $83,200 $6,000 $7,904 ($1,904)
9.5% of Individual Income
Employer Cost: $4,240
$500 Employee only Monthly Premium
www.apspayroll.com

19. Prong 2 - Minimal Essential
Coverage
Coverage that satisfies the INDIVIDUAL MANDATE includes the following types
of coverage:
• Coverage under an "eligible employer-sponsored plan" which the proposed
Treasury rule defines generally to mean coverage under a group health
plan whether insured or self-insured, including coverage under a federal or
non-federal governmental plan
• Coverage under an employer-sponsored retiree health plan
• Coverage under certain government programs, such as Medicare,
Medicaid, the Children's Health Insurance Program (CHIP), and TRICARE
• Coverage in the individual insurance market, including a plan offered by a
Marketplace
AND
• Other coverage recognized by HHS, including self-funded student health
coverage and coverage under Medicare Advantage plans
www.apspayroll.com

20. Projected costs for essential health benefits (EHB) coverage for the group
Projected charges for EHB coverage for a typical self-insured group health plan population
Prong 3 - Minimum Value (MV)
The ACA provides that an employer group health plan fails to offer MV if "the
plan's share of the total allowed costs of benefits provided under the plan is less
than 60% of such costs." - Human Health Services (HHS) is defining these rules
The HHS rules offer several options for calculating MV
• Use the HHS MV Calculator (online tools)
• Apply a Safe Harbor developed by HHS and the IRS
• Provide an actuarial certification from a member of the American Academy
of Actuaries
• Small group plans also meet MV requirements if they provide a bronze level
plan
www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/
www.apspayroll.com
Formula:

21. 2014 - Two Types of Penalties
1. Penalty of *$2,000 per full-time employee and
paid annually (excluding the first 30) if at least one
FTE receives a government subsidy to buy
coverage on a Marketplace
1. Employers that offer coverage to employees may
still face a "free rider" penalty if the coverage
offer is deemed unaffordable or low in value -
*$3,000 for each employee that receives a subsidy
NOTE: There are special rules on the penalty calculation for employers
that are part of a control group.
*Penalty figures above may also be presented as a monthly amount
www.apspayroll.com

22. Required Reporting
W-2 Health Costs Reporting Requirement
• Employers are required to report the aggregate cost of applicable
employer-sponsored coverage on W-2
• The aggregate cost of coverage includes costs paid by both employer and
employee and should be calculated on a calendar year basis regardless of
when the plan renews
• At this point, information only, not taxable
NOTE: Specific coverages are excluded (i.e. accident only coverage)
www.apspayroll.com

23. Required Reporting
Under IRC Section 4980H, ALE must comply with annual IRS reporting requirements
(50+ employees):
• Employer details (name of business, employer identification number)
• Confirm full-time employees are offered coverage through an employer-sponsored plan
• Details regarding the employer-sponsored plan (waiting period, availability, premium costs,
employer’s share of costs of benefits)
• Number of full-time employees for each month during the year
• The name, address, and tax identification number of each full-time employee during the year
and the months during which he or she was covered under the employer-sponsored health-
benefit plan
CHALLENGE: May impact your benefits administration in the future by having to
report dependents being offered coverage and if the health plan coverage meets the
MEC and MV.
STRATEGY: Utilizing a unified solution for benefits administration will help with
reporting compliance
www.apspayroll.com

24. Are You Prepared to Meet Reporting
Requirements Under the ACA?
Ask yourself:
• Do you have the capability to pull all this data from your
payroll and/or HR/benefits administration system?
• Do you have to pull this information from multiple
systems?
• Do you have the ability to pull the information info a
manageable format for tracking and reporting it to
agencies and executives?
www.apspayroll.com

25. Strategy #1 - Avoid Fines
Required Systems Avoid Fines
Time & Attendance Identify seasonal staff
Proactive management of part-time/variable staff
hours
Electronic Time and Attendance Records - Present
and Historical Data for Audit Trail
Payroll Aggregate premium
Hours of service/Lookback decision
W-2 wages
IRC Section 4980H reporting
HR with Benefits
Administration
Enrollment tracking - individual and dependent
coverage offered and waived, 95% coverage
threshold,
Benefit election/change logs
Document management - waivers, SOB's, enrollment
elections
IRC Section 4980H reporting
www.apspayroll.com

26. Strategy #2 - Risk Some Fines
Required Systems Risk Some Fines
Time & Attendance Identify seasonal staff
Proactive management of part-time/variable staff
hours
Electronic Time and Attendance Records - Present
and Historical Data for Audit Trail
Payroll Aggregate premium
Hours of service/Lookback decision
W-2 wages
IRC Section 4980H reporting
HR with Benefits
Administration
Effective and efficient benefits administration -
enrollment tracking, document management
Benefit election/change logs
IRC Section 4980H reporting
www.apspayroll.com

27. Strategy #3 - Pay Fines
Required Systems Pay Fines
Time & Attendance Identify seasonal staff
Proactive management of part-time/variable staff
hours
Electronic Time and Attendance Records - Present
and Historical Data for Audit Trail
Payroll Aggregate premium
Hours of service/Lookback decision
IRC Section 4980H reporting
HR with Benefits
Administration
www.apspayroll.com

28. Managing ACA Requirements -
System Capabilities
1. Report Aggregate Cost of Health Insurance - Employers who are subject to this
reporting requirement should already be familiar with this.
1. Applicable Large Employer Calculation - Determine how many FTEs you have
1. Health Insurance Marketplace Notices (Oct 1, 2013) - Must be provided to
current and new employees
1. Determine Lookback and Stability Period - Identify lookback period and stability
period that mitigates your company's exposure
1. Part-Time Staff Management - Avoid any employees exceeding the 30 hours per week
threshold that shouldn't
1. Tracking Employee Benefit Enrollment - Know which employees are currently
enrolled, those who have declined, and those newly eligible
1. Health Plan Coverage Reporting - Due to the IRS beginning 2015 for calendar year
2014
www.apspayroll.com

29. Resources
• www.apspayroll.com/about-us/affordable-care-act-resource-page
• www.irs.gov - IRS
• www.dol.gov - Department of Labor
• www.federalregister.gov - Federal Register
• www.cciio.cms.gov - The Center for Consumer Information & Insurance Oversight
• www.shrm.org - Society of Human Resources Management
• www.kff.org/health-reform - The Kaiser Family Foundation
Contact Info: Christian - cvaliulis@apspayroll.com
Tracy - tphillips@qnins.com
www.apspayroll.com

30. Questions?
www.apspayroll.com