Patient Protection and Affordable Care Act What Employers Need to Know 2014 and 2015 PowerPoint slides

1. John J. Sarno, Esq.
Employers Association of N.J.
www.eanj.org
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2. Medicaid Expansion January, 2014
Single individual: $17,500 / year
Parent with child: $23,500 / year
Family of 4: $36,000 / year
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3. Medicaid/CHIP Notice
No later than first day of Plan year
Most eligible individuals work full or part-time
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4. Health Insurance Marketplace
A one-stop web portal where individuals and small
businesses can shop for plans, compare prices, and
receive other information.
Plans must 1) offer essential benefits, 2) have
consumer protection standards, 3) have a minimum
value, and 4) be affordable.
States define “small business.” Cannot exceed 50
employees.
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5. Carriers
 Horizon Blue Cross Blue Shield
 AmeriHealth
 Health Republic Insurance of NJ (non-profit
cooperative)
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6. The Marketplace, Prices and
Subsidies- N.J.
29 plans within 4 categories
Platinum
Gold
Silver – benchmark plan (70% of healthcare costs)
Bronze
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7. Minimum Value
Platinum (pays 90 percent of the value of benefits)
Gold (80%)
Silver (70%)
Bronze (60%)
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8. Eligibility for Premium Subsidy
Individuals with incomes up to 400 FPL.
$46,000 / year (2013)
$94,200 / year (family of 4)
Expected amount of subsidize for N.J. - $700 million
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9.  27-year old earning $25,000/year
Silver plan - $260/month
with subsidy - $145/month
 Family of 4 earning $50,000
Silver Plan - $943/month
with subsidy - $282/month
Bronze Plan with subsidy - $131/month
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10. Maximum Out -of-Pocket Premium Payments
400% of poverty level
Single - $4,115
Single/Spouse - $5,537
Family 3 - $6,958
Family 4 - $8,379
Source HHS (2009)
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11. Notice to Employees – October 1, 2013
(thereafter at the time of hire)
Part A: General information about Health Insurance
Marketplace, coverage standards and help paying
premiums.
Part B: General information about coverage offered by
employer (if any)
Detailed information about plan is optional.
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12. COBRA Notices
HHS Technical Advice requires COBRA Notice contain
general reference to Insurance Healthcare Marketplace
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13. Employer Healthcare Plans
 Essential Benefits
 Consumer Protections
 Minimum Value
 Affordable
Employee will not get subsidy if employer offers
coverage that meets standards.
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14. “Average” Employer Plan
“Essential Health Benefits” requires minimum set of
benefits, with no lifetime of annual coverage limits
 Ambulatory patient services
 Emergency services
 Hospitalization
 Maternity and newborn care
 Mental health and substance abuse coverage
 Prescription drugs
 Rehab services and medical devices
 Preventative and wellness/chronic disease management
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15. Consumer Protections
All Plans
 No lifetime maximums of essential benefits
 No annual maximums on essential benefits, except as allowed
by the secretary of HHS
 Provide coverage for children up to age 26
 No pre-existing condition exclusion on children under age 19
 No rescissions of coverage
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16. Consumer Protections
(continued)
 Cover preventive services at 100%
 Includes immunizations, child preventive care and women’s
health screenings
 Insured health plans must comply with
nondiscrimination requirements
 Generally prohibits discrimination in favor of highly
compensated individuals as to eligibility and benefits under
the plan
 New Appeals process for insurers
 Waiting periods cannot exceed 90-days for employee
or dependent otherwise eligible to enroll
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17. In-Network, Out-of-Network
Plans will typically provide essential benefits and
preventive services in-network.
Out-of-network – no co-pays, deductibles or
limitations.
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18. Minimum Value
Plan must pay at least 60% of healthcare costs
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19. Affordability
Full-time employee cannot pay more than 9.5% of
household income for his/her share of premium for single
coverage. Lowest cost plan.
Safeharbor: Employer may use W-2 income for employee.
(Box 1)
Rate of Pay Safeharbor – Hourly rate multiplied by 130
hrs/month. Determine affordability using monthly
premium based on monthly wage. For salaried employee,
monthly wage can be used. Does not apply where wages
were reduced during the year.
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20. Notices to Full-time employees and
IRS
(50 or more full-time employees) “Large” employer
For calendar years after December 31, 2014
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21. “Large” Employer:
Employers with 50 or more “full-time” employees will be penalized for
not offering coverage or coverage that does not meet standards.
All employees counted in a calendar month (part-time, temporary,
seasonal).
“Full-time” employee is someone who is employed to perform services
on average of 30-hrs per week or 120 hrs/month.
Part-time employees are grouped together to create “full-time”
equivalents.
Aggregate number of hours worked by part-time workers in any month
and divide by 120 to determine number of full-time equivalents.
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22. “Services” includes all hours an employee is paid or
entitled to be paid – vacation, sick, holiday, jury
Hourly Workers – Records of hours worked and paid
have time off
Salaried Workers – Records of equivalency
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23. Add “full-time equivalent” number to total full-time
employees to determine whether employer has 50
“full-time” employees.
Used only for the purpose of determining whether
employer has 50 or more employees.
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24. Seasonal employees’ hours are included when
determining whether employer is “large”
But
An employer will not be a “large” employer if it
employed 50 or more full-time employees for no more
than 120 days in the preceding calendar year.
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25. Firms with “common ownership” are combined
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26. Full-time employees on or before
January 31
Form 1095-C
Information about plan, premiums, individuals
enrolled, etc.
The employee’s share of the lowest monthly premium
(self only)
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27. Reports to IRS
Form 1094-C on or before February 28
 Number of full-time employees for each month of the
calendar year
 Certification that all full-time emplyees were offered
coverage
 Each employee's share of the lowest monthly premium
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28. Auditing and Enforcement
 U.S. Department of Treasury (IRS)
 U.S. Department of HHS
 U.S. Department of Labor
Combined databases – Form W-2, Form 5500, Social
Security Administration database.
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29. “Large” Employer Penalty (50 or
more full-time employees)
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2015 – 100 employees or more
2016 – 50 – 99 employees

30. Penalty for not offering insurance or to less than
70% of full-time employees (2015) and 95% (in
2016) and at least one FTE receives a subsidy to
pay for insurance on the Exchange
 $2,000 per full-time employee after first 30 employees
Penalty for offering unaffordable or less than
minimum value and at least one FTE receives
subsidy
 $3,000 for each full-time employee receiving a subsidy
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31. Full-time employee means an employee who is
employed on average of 30 “hours or service” per week
or 130 hours/month
FTE are not counted
“Temporary” or short-term employees may be full-time
(3-months or more)
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32. “Hours of service” means hour paid or paid time off.
Employees paid a commission must have reasonable
method of crediting hours of service
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33. Employee Protections
Employer can not interfere or discriminate against an
employee for seeking or receiving subsidy.
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34. Reduction of Hours
Employee Retirement Income Security Act (ERISA)
Unlawful employment practice to intentionally
interfere with benefits, including healthcare benefits
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35. Safe Harbors
What happens if any employer cannot determine
whether an employee will work 30 or more hours per
week?
Current employees
New employees
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36. Standard Measurement
Period
3-12 months duration
Administrative period
up to 90 days
Stability Period
longer of 6 months
or duration of
measurement period
OPTIONAL “SAFE-HARBOR” TO DETERMINE
FULL-TIME STATUS (for shared responsibility penalty)

37. 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1
2014 2015
Any on-going employee who worked full time
during a standard measurement period
must be considered full-time for the
subsequent stability period.
Standard
Measurement Period
Administrative
Period
Stability Period

38. 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4
2014 2015
If the employee is determined to be part time during the initial
measurement period
-- coverage need not be offered for the stability period
November 1, 2014 through April 30, 2015
If the employee is determined to be full time during the initial
measurement period
-- coverage must be offered for the stability period to avoid a
penalty
employee
start date
INITIAL
Measurement Period
Administrative
Period
Stability Period
Determination for NEW variable hours or seasonal employee

39. W-2 Reporting (250 or more W-2s)
 Employers are required to disclose the value of health
coverage provided to an employee on a W-2
 This value includes medical coverage, HRA
contributions, and possibly EAPS and wellness
programs
 Contributions to HSAs, Archer MSAs, and health FSAs
are not included
 Need additional guidance
 Does not include Dental or Vision care
Effective for taxable years beginning January 1, 2011
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40. Automatic Enrollment
All new “full-time” employees will be automatically
enrolled, subject to regulations. Notice will include
opportunity to opt out. Current employees will be auto
enrolled.
Applies to employers with 200 or more “full-time”
employees and who offer a health care plan.
Regulations have not been issued.
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41. Non-Discrimination Eligibility -
70% of all employees are covered,
or
80% of “eligible” employees and 70% of all employees
are eligible
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42. Highly Compensated - Benefits
Same benefits
Same choice of benefits
Same premiums
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43. Questions?
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Thank You