AFORDABLE CARE ACT (ACA)

Transcription

1 AFORDABLE CARE ACT (ACA) The Patient Protection and Affordable Care Act of 2010, commonly known as the Affordable Care Act (ACA), contain several key programs and mandates for employers and individuals. The ACA is intended to offer medical insurance to all Americans, regardless of pre existing conditions. This is not meant to be a comprehensive overview of the ACA, please see list of websites provided under Resources for detailed information. Provisions went into effect on January 1, 2015, and apply to ALL employees. Due to the seasonality in which Un Cruise Adventures operates and employs, the ACA provides the option to use a system of measurement and stability periods to determine, in advance of a coverage period, which variable hour and seasonal employees qualify as full time. The employee s status as full time or part time, based on the measurement period, governs the employee s status for the subsequent stability period, even if the employee s hours change during the stability period. DETERMINING STATUS OF UCA SEASONAL MARINE EMPLOYEES 1) To determine full time status and eligibility, seasonal employees must go through a measurement period where UCA is required to track hours. If the seasonal employee is determined to be a full time employee within the period, then they must be offered insurance for the duration of the stability period. a) Seasonal employees will have a measurement period of 12 months. The subsequent stability period is of equal duration. b) A full time employee for this purpose is an employee who is employed on average at least 30 hours per week. A monthly equivalent of 130 hours or 1560 hours during the 12 month measurement period is used for our seasonal employees. 2) If the seasonal worker does NOT reach the minimum # of hours for full time status, they are measured again in the next measurement period for eligibility, and so on and so on for each following year. 3) If a seasonal employee works the minimum # of hours to be classified as full-time during the measurement period, but then does not work with the company for 13 weeks or more, when the employee is re-hired, they are treated exactly as a new hire, and they are measured again. 4) During the measure period, UCA does not offer insurance. Measurement Period Definitions: The Measurement Period is a period of time during which an employer tracks hours of service for their employees. These hours are used to determine which employees qualify as full time under Page 1 of 7

2 the ACA definition of a full time employee. The period is the same each year. The Initial Measurement Period is a period of time during which an employer tracks hours of service for their newly hired employees. These hours are used to determine which employees qualify as full time under the ACA definition of a full time employee. The period begins the 1 st of the month following Date of Hire. The Administrative Period is intended to allow employers to: Determine ACA Benefit Status for their employee population Offer enrollment opportunity to those who are eligible for benefits Complete enrollments & related administrative tasks The Stability Period is the period of time that the employer must offer coverage to employees who were determined to have full time status during the preceding measurement period. THE INDIVIDUAL SHARED RESPONSIBILITY MANDATE Beginning in 2014, the Affordable Care Act includes a mandate for most individuals to have health insurance or potentially pay a pena ty for noncompliance (the individual shared responsibility payment ). Individuals will be required to maintain minimum essential coverage for themselves and their dependents. Some individuals will be exempt from the mandate or the penalty, while others may be given financial assistance to help them pay for the cost of health insurance. If you can afford health insurance but choose not to buy it, you must have a health coverage exemption or pay a fee. The fee is sometimes called the "penalty," "fine," "individual shared responsibility payment," or "individual mandate. If you are without ANY health insurance coverage for more than 90 consecutive days (3 months), then you will be subject to the individual tax penalty. This is an individual mandate Un Cruise Adventures does not track this it us to up to the individual to make sure they don t have a gap in coverage of more than 90 days in any 1 calendar year. Example 1: Employee A was hired by UCA in April Insurance coverage is effective on July 1st, 2014 due to the probationary waiting period. Employee A has coverage for July, August, September, and October, and then laid off in November. The 90 days accrual started 1/1/2014. Since Employee A was without coverage for January June, 2014 (6 months), Employee A would be assessed the individual tax penalty on those 6 months. No penalty would be assessed for December. Page 2 of 7

3 Example 2: Employee B is laid off in November 2013 but re hired by UCA in January Insurance coverage started March 1 st, 2014 due to the probationary waiting period. Employee B is again laid off in October 2014 Employee B wouldn t be assessed the penalty for the 2014 tax year because Employee B s gap in coverage wasn t more than 90 consecutive days (the gaps in coverage being the months of January, February, November, and December). It is in all our employees best interest to find alternate health insurance that will effectively cover them through the months they are not covered on the company group health plan. The fee for not having coverage in 2014 If you didn t have coverage in 2014, you ll pay the higher of these two amounts when you file your 2014 federal tax return: 1% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,000 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan. $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285. The fee in 2015 If you don t have coverage in 2015, you ll pay the higher of these two amounts: 2% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,000 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan. $325 per person for the year ($ per child under 18). The maximum penalty per family using this method is $975. The fee after 2015 The penalty increases every year. In 2016 it s 2.5% of income or $695 per person. After that it's adjusted for inflation. If you re uninsured for just part of the year, 1/12 th of the yearly penalty applies to each month you re uninsured. If you re uninsured for the less than 3 months, you don t have to make payment. How is the penalty collected? You ll pay the fee on the federal income tax return you file for the year you don t have coverage. Most people will file their 2014 returns in early 2015 and their 2015 returns in early Page 3 of 7

4 If you pay the fee, you re not covered It's important to remember that even if you pay the penalty you still don't have any health insurance coverage. You are still responsible for 100% of the cost of your medical care. If I am unemployed, do I have to pay the fee? It depends on your household income. If insurance is unaffordable to you based on your income, you may qualify for an exemption from the fee. Complete an application in the Health Insurance Marketplace to determine whether your income qualifies you for an exemption. What happens if I don't pay the fee? The IRS will hold back the amount of the fee from any future tax refunds. There are no liens, levies, or criminal penalties for failing to pay the fee. Exemptions from the payment Under certain circumstances, you won t have to make the individual responsibility payment. This is called an exemption. You may qualify for an exemption if: You re uninsured for less than 3 months of the year The lowest priced coverage available to you would cost more than 8% of your household income You don t have to file a tax return because your income is too low (Learn about the filing limit.) You re a member of a federally recognized tribe or eligible for services through an Indian Health Services provider You re a member of a recognized health care sharing ministry You re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare You re incarcerated, and not awaiting the disposition of charges against you You re not lawfully present in the U.S. Hardship exemptions If you have any of the circumstances below that affect your ability to purchase health insurance coverage, you may qualify for a hardship exemption: 1. You were homeless. 2. You were evicted in the past 6 months or were facing eviction or foreclosure. 3. You received a shut off notice from a utility company. Page 4 of 7

5 4. You recently experienced domestic violence. 5. You recently experienced the death of a close family member. 6. You experienced a fire, flood, or other natural or human caused disaster that caused substantial damage to your property. 7. You filed for bankruptcy in the last 6 months. 8. You had medical expenses you couldn t pay in the last 24 months. 9. You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member. 10. You expect to claim a child as a tax dependent who s been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child. In this case, you do not have the pay the penalty for the child. 11. As a result of an eligibility appeals decision, you re eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost sharing reductions for a time period when you weren t enrolled in a QHP through the Marketplace. 12. You were determined ineligible for Medicaid because your start didn t expand eligibility for Medicaid under the Affordable Care Act. 13. Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable. 14. You experienced another hardship in obtaining health insurance. Note: If you get an exemption because coverage is unaffordable based on your expected income, you may also qualify to buy catastrophic coverage through the Marketplace. This may be more affordable than your other options. If your income will be low enough that you will not be required to file taxes: You don t need to apply for an exemption. This is true even if you file a return in order to get a refund of money withheld from your paycheck. You won t have to make the shared responsibility payment. If you ha e a gap in coverage of less than 3 months, or you're not lawfully present in the U.S.: You don t need to apply for an exemption. This will be handled when you file your federal tax return. Page 5 of 7

6 Getting coverage outside the Marketplace Open Enrollment Apply with a Special Enrollment Period After Open Enrollment, you can enroll in private coverage through the Marketplace only if you have a qualifying life event or a complex situation related to applying in the Marketplace. In the Marketplace, you generally qualify for a special enrollment period of 60 days following certain life events that involve a change in family status (for example, marriage or birth of a child) or loss of other health coverage. If you don t have a special enrollment period, you can t buy insurance through the Marketplace until the next Open Enrollment period. If you think you qualify for a special enrollment period, start a Marketplace application. When you finish your application and get to your To do list page, you ll see a statement that you can enroll only if you have a special enrollment period. Continue the process and enroll in a plan. Private plans outside the Marketplace In some limited cases some insurance companies may sell private health plans outside the Marketplace and outside Open Enrollment that count as minimum essential coverage. These plans meet all the requirements of the health care law, including covering pre existing conditions, providing free preventive care, and not capping annual benefits. If you have one of these plans, you won t have to pay the fee that some people without coverage must pay. Insurance companies, agents, brokers, and online health insurance sellers may offer these health plans outside the Marketplace. The Marketplace does not list or offer these plans. You can t get premium tax credits or lower out-of-pocket costs for plans you buy outside the Marketplace. Insurance companies can tell you if a particular plan counts as a minimum essential coverage. Each plan s summary of benefits and coverage also includes this information. Page 6 of 7

7 RESOURCES For complete information, go to the Official site of the Affordable Care Act Special Enrollment Period through the Marketplace enrollment period/ Fees & exemptions overview exemptions/ How health coverage affects your 2014 federal income tax return Page 7 of 7