Implementation issues for kentucky school districts
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Implementation Issues for Kentucky School Districts. Affordable Care Act. Presenters. Melissa Sullivan [email protected] 502-564-3930 extension 4415 Susan Barkley [email protected] 502-564-3930 extension 4437. Resources.

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Implementation issues for kentucky school districts

Implementation Issues for

Kentucky School Districts

Affordable Care Act


Presenters

Presenters

  • Melissa Sullivan

    [email protected]

    502-564-3930 extension 4415

  • Susan Barkley

    [email protected]

    502-564-3930 extension 4437


Resources

Resources

  • KDE website: Health and Life Insurance Benefits and Flexible Spending Accounts page

  • http://education.ky.gov/districts/FinRept/Pages/Health-and-Life-Insurance-Benefits-and-Flexible-Spending-Accounts.aspx

    • Implementation Guide

    • Timekeeping documentation

    • KEHP FAQs and Responsibility Chart


Disclaimer

Disclaimer

  • The Guide is only one of many resources

  • IRS continues to issue regulations on ACA

  • Information in the Guide could become inaccurate

  • Not comprehensive of all aspects of ACA

  • Consult legal counsel


Whose responsibility

Whose Responsibility?

  • Districts:

    • Eligibility and offers of coverage (Play or Pay)

    • Nondiscrimination

    • Marketplace Notice

    • Employer Reporting

  • KEHP:

    • Affordable coverage

    • Adequate coverage

    • Plan details and options


Affordable care act

Failure to comply = PENALTY


Affordable care act

The ACA seems like a mountain


Affordable care act

But KEHP is taking care of compliance with affordability and adequacy requirements


Affordable care act

And MOST employees are already receiving health benefits, including bus drivers


Affordable care act

And we know many variable hour employees won’t work enough separate days at 8 hours a day to change their eligibility status – therefore we don’t need to track their actual time


Affordable care act

So the work we have to do for ACA isn’t as big a mountain as we expected


What do we have to deal with

What do we have to deal with?

  • Establish policies relating to ACA

  • Track actual time for employees close to the eligibility break point and part-timers

  • Calculate eligibility for all variable hour employees

  • Document offers of coverage

  • Provide marketplace notice to new hires

  • Ensure nondiscrimination

  • Employer reporting to IRS


Who do we need to worry about

Who Do We Need to Worry About?


Expectations

Expectations

  • If employee is expected to work full-time must offer coverage at the time of hire

  • If it is unknown if the employee will have an average of 30 service hrs/week or 130 service hrs/month, use the measurement period


Action steps

Action Steps

Repeat Annually


Who are employees

Who are Employees?

An employee relationship exists when the employer has the right to control and direct the individual who performs the services and the details and means by which the result is accomplished.


Who are employees1

Who are employees?


Large employer

“Large” Employer

  • 2015 = 100 or more FT & FTEs

  • 2016 = 50 or more FT & FTEs

  • Most KY school districts are large


Hours of service

“Hours of Service”

  • Hours actually worked (or equivalency)

  • Hours paid or entitled to be paid

    • Vacation

    • Holiday

    • Sick leave

    • Disability

    • Jury duty

    • Military duty


Equivalency hours

Equivalency Hours


Employment breaks

Employment Breaks

  • Breaks at least 4 consecutive weeks in length

  • Cannot count zero hours worked

  • Exclude from average hours of service

    Examples: summer break, FMLA leave


Eligibility break point

Eligibility Break Point

  • Step 1 – calculate number of days excluding breaks of > 4 weeks

  • Step 2 – multiply 5.997 by the number of days from Step 1 and then divide by 8

    5.997 * 207 / 8 = 154 days


Do i need to track actual time

Do I need to track actual time?

  • To limit the number of employees tracking actual time worked:

    • Limit number of days/year

    • Limit number of days/week

    • Use equivalency of 8 hrs/day


Board action

Board Action

  • Measurement, administrative, and stability periods

  • Limitation of days worked

  • Track actual hours or use equivalency

  • Terminate subs that refuse

    assignments


Full time employees for aca

Full-time Employees for ACA

Employees who average

30 hours of service per week or

130 hours of service per month


Who is full time

Who is Full-time?

Average hours of service over measurement period

  • Max 12 months

  • Recommended:

    October 3, 2013 – October 2, 2014

  • Don’t forget to exclude breaks >4 weeks


Recommended measurement periods

Recommended Measurement Periods

Continually measuring


What about mid year hires

What About Mid-Year Hires?

  • InitialMeasurement Period

    • Begins the first day of the month after hired

    • Max 12 months

    • Transitions to standard measurement period


Initial measurement period

Initial Measurement Period

Note that the standard measurement period begins during the initial measurement period; both periods occur simultaneously


Offering coverage

Offering Coverage

  • ACA requires coverage for full-time employees and dependent children – not spouses

  • Coverage must begin Jan 1, 2015 for districts with 100 or more full time & FTEs

  • Coverage must begin Jan 1, 2016 for districts with 50 or more full time & FTEs

  • Offer must be made, employee can decline

  • Maintain documentation

  • Annual requirement


Offering coverage1

Offering Coverage

  • Full-time during Measurement Period = Coverage during Stability Period regardless of hours of service during Stability

  • NOT full-time during Measurement Period = NO coverage during Stability Period regardless of hours of service during Stability


Cobra

COBRA


Funding

Funding

  • State funds non-federal employee premiums

  • If health insurance appropriation is inadequate, unexpended SEEK funds may be used

  • Avoid a blanket policy to offer coverage to all employees


Penalty

Penalty

  • If no Substantial Compliance

    • For 2015 - 70% of full-time employees

    • Starting in 2016 - 95% or no more than 5 full-time employees

  • Penalty is

    • Number of full-time employees minus 30

    • Multiplied by $167 per month


Nondiscrimination

Nondiscrimination

  • Cannot provide more for highly compensated employees

  • Example: paying the superintendent’s employee premiums

  • Penalty is

    • Number of employees minus the superintendent

    • Multiplied by $100 per day until in compliance

  • Solution: tax the additional benefit


Employer reporting

Employer Reporting

  • Will be required

  • First report due March 2016 for 2015 plan year data

  • IRS guidance not finalized

  • More information forthcoming


Your good questions

Your Good Questions


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