Implications of the affordable care act part ii (2)

Implications of the Affordable Care Act in the Half Hollow Hills Central School District Part II Half Hollow Hills Board of Education March 2, 2015 Dr. Patrick Harrigan

Introduction • The Affordable Care Act (ACA) • Public Law 111-148, 111-152, and 112-10 (900 pages) • Commonly referred to as “ObamaCare” • Federal Register, Vol. 78 No. 1, January 2, 2013 • Regulated by The Internal Revenue Service

Employer Administrative Duties • Provide a Summary of Benefits & Coverage • 60 Days Notice for any Changes in the Group Policy or a $1,000 Penalty per employee (or in HHH $2 million) • W – 2 Reporting of aggregate costs.

• Exchange Notice • Medicare Tax Change 0.9% $200K individual / $250K Married • Duty to Automatically Enroll (at least 200 Employees)

Unfunded Mandate • Beginning January 1, 2015 employers will have SHARED RESPONSIBILITY with the Federal government regarding the costs of the ACA. • Applies to all employers with 50+ employees including not for profit and public employers.

• “Play or Pay”

Effective Date(s) • • • •

Individual – January 1, 2015- 75% Individual – January 1, 2015 – 95% Dependents – January 1, 2016 Waiting Period not to exceed 90 days

Penalties • $2,000 Severe Penalty – in Half Hollow Hills up to $4 million for failure to offer coverage to 95% ($2,000 per full-time employee).

• $3,000 Penalty – for failure to provide coverage that is affordable and offers a minimum value.

• Non-discrimination Penalty $500,000.

Large Employers • Defined as companies with 50 or more employees. • Half Hollow Hills had 2,214 Employees During the Measurement Period.

Full-time Employees 30 + Hours / week 130 Hours / Month 501 Hour Rule for School Employees Substitute and Other per-diem employees • “Standard Measure Period” • • • •

Half Hollow Hills Employees • • • • • • • •

With Coverage: Teachers Paraprofessionals Administrators Clerical Buildings & Grounds Transportation Managerial / Confidential

• • • • • •

Without Coverage: Substitute Teachers Monitors Food Service Workers Security Guards Per-Diem Employees

Affordable Coverage • If the employee premium contribution exceeds 9.5% of an employee’s annual household income the coverage is unaffordable.

• Safe harbor annual household income would be the employee’s W-2 amount.

• Annual Cost of Individual NYSHIP Empire $9,660 • Annual Cost of Family NYSHIP Empire $21,300 • As these costs are increased by New York State affordability will become increasingly difficult to achieve.

Measurement Period • Resolution this evening to adopt November 1, 2013 through October 31, 2014 as the 2015 Measurement Period.

• Administrative Period: November 1, 2014 through December 31, 2015.

• Stability Period: January 1, 2015 through December 31, 2015.

• Initial Measurement Period Length: 12 months beginning on the first day of the new month following the employee’s first day of work

Preliminary Results of Measurement • Estimates Ongoing Full-Time Employees (those who were employed for the entire measurement period) 1,139. (In addition 832 Part-time) • Those offered Coverage 1,094 • Those not offered Coverage 45 • Percentage of Employees offered Coverage 96.05% • Percentage of Employees offered Affordable Coverage 90.87% (n=104)

Affordability -Safe Harbor • To determine whether health care coverage is affordable for purposes of determining liability under Section 4980H, employers may adopt any of the following safe harbors: o (a) “Form W-2” wages; o (b) “Rate of Pay”; and/or o (c) “Design Based” or “Federal Poverty Level.”

W-2 Safe Harbor • “Form W-2 Safe Harbor”: Generally, the district may calculate an employee’s “household income” as 9.5 percent of the number listed in “Box 1” of that employee’s W-2 Form. This number does not include the employee’s elective deferrals to a Section 401(k), Section 403(b) or Cafeteria Plan; and/or

Rate of Pay Safe Harbor • “Rate of Pay Safe Harbor” : Generally, the employee’s monthly contribution must not exceed 9.5 percent of an amount that is equal to 130 hours multiplied by the employee’s hourly rate of pay. For salaried employees, employers may use the monthly rate of pay (instead of “130 hours multiplied by the employee’s hourly rate of pay”).

“Design Based” or “ Federal Poverty Level (‘FPL’ ) Safe Harbor ” “Design Based” or “ Federal Poverty Level (‘FPL’ ) Safe Harbor ” : Generally, the employee’s monthly contribution may not exceed 9.5 percent of an amount that is equal to the FPL for a single individual.

For this purpose, districts may use the most recentlypublished FPL guideline for New York State as of the first day of the district’s plan year.