Employer Mandate Report

Transcription

1 Employer Mandate Report 1 NOTE: The materials and opinions presented by the speaker at this program represent the speaker s views, are for educational and informational purposes only, are not intended to be legal advice and should not be used for legal guidance or to resolve specific legal problems. In all cases, legal advice applicable to your organization s own specific circumstances should be sought. 2 What s Happened Now? Final regulations for the employer mandate were published in the February 12, 2014, Federal Register 3 1

2 Download the New Regulation and DOL s Comments 4 The Paper That Accompanies This Session 5 Delay for Medium Sized Agencies Employers with 100 or more FT and FTE employees starting in 2015 Employers with FT and FTE employees starting in

3 Conditions for Delay for Medium Sized Agencies Workforce size of FT and FTEs Maintain workforce and aggregate hours of service Maintain previously offered health coverage Certify eligibility for the delay 7 What Does the Delay Mean for You? 8 It Is a Two Step Analysis Step 1 Is your organization covered by the employer mandate? Step 2 If it is covered by the mandate, will a penalty be assessed, and if so, how much will it be? 9 3

4 Step 1 Is Your Organization Your organization is covered by the employer mandate with respect to a calendar year if it employed 50 or more full-time and full-time equivalent employees during the preceding calendar year. Whether your organization is covered in 2015 depends on the make up of its workforce in Whether it is covered in 2016 depends on the make up of its workforce in Step 1 Is Your Organization How to Count Employees The number of full-time employees in a month PLUS The number of full-time equivalent employees in that same month 11 Step 1 Is Your Organization What Is Full-Time? At least 130 hours of service in a calendar month An employee who is not a full time employee for a given month is taken into account in the FTE calculation 12 4

5 Step 1 Is Your Organization How To Calculate FTEs Divide: (a) the total hours of service during the month by employees who are not full-time employees by (b) 120 The result is the number of FTEs for that month 13 Step 1 Is Your Organization Calculation of Hours of Service Each hour for which the employee is paid or entitled to payment, and Each hour for which an employee is paid for vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty, or leave of absence Not more than 120 hours for any employee who is not a full time employee for that month. 14 Step 1 Is Your Organization Calculation of Hours of Service Hourly Employees Use actual hours of service Non-Hourly Employees Must use one of the following methods Use actual hours of service Use a days worked equivalency Use a weeks worked equivalency 15 5

6 Step 1 Is Your Organization Calculation of Hours of Service Bona Fide Volunteers Only for government entity or a 501(c) organization Regulations define who is a bona fide volunteer On-Call Employees Guidelines will be issued in the future Until then, guidance in the comments to the regulations 16 Step 1 Is Your Organization How To Convert Months To A Year Add together the 12 monthly full-time and FTE employee totals and divide by Step 1 Is Your Organization How To Convert Months To A Year If the result from the previous slide is less than 50, your organization is not subject to the employer mandate the following year. If the result from the previous slide is 50 or more, your organization is subject to the employer mandate the following year. 18 6

7 Step 1 Is Your Organization Transitional Option Use 6 consecutive calendar months in 2014, rather than entire year. The employer choses the 6 consecutive months 19 If your organization is not covered by the employer mandate for a calendar year, it is not subject to penalties for that year. Your organization still could be subject to penalties in later years. Coverage is determined year to year. 20 The penalty calculation is different if your organization does not offer minimum essential insurance coverage than if it does offer minimum essential insurance coverage. 21 7

8 Affordable means the employee s contribution for employee only coverage does not exceed 9.5% of employee s household income and the plan pays at least 60% of the plan s total cost of benefits. 22 Taxpayer assisted coverage means the individual receives either a premium tax credit, a cost sharing reduction, or both. 23 Dependent means children under 26 years of age. It does not include a spouse. In addition, it does not include a step child, foster child or grandchild. Nor does it include an individual who is not a citizen or national of the U.S. unless the individual is a resident of the U.S. or a country contiguous to the U.S. 24 8

9 If Health Insurance Is Not Provided A penalty will be assessed for a month if: (1) Your organization does not offer minimum essential insurance coverage to its full-time employees and their dependents; and (2) It has at least one full-time employee who receives taxpayer subsidized coverage that month. 25 If Health Insurance Is Not Provided The penalty for that month will be 1/12 th of $2,000 (i.e. $166.67) per full-time employee after the first 30 full-time employees. 26 If Health Insurance Is Provided A penalty will be assessed for a month if: (1) Your organization does offer minimum essential insurance coverage to its full-time employees and their dependents; and (2) It has at least one full-time employee who receives taxpayer subsidized coverage that month. 27 9

10 If Health Insurance Is Provided The penalty for that month will be the lesser of: (a) 1/12 th of $3,000 (i.e. $250) for each full-time employee who receives taxpayer subsidized coverage that month; or, (b) 1/12 th of $2,000 (i.e. $166.67) per full-time employee after the first 30 full-time employees. 28 Transitional Relief for 2015 For 2015 (plus any calendar months in 2016 that fall within the employer s 2015 plan year), penalties will be calculated by reducing the employer s number of fulltime employees by 80 rather than 30. In other words, no penalties for the first 80 full-time employees This applies only for Affordability Safe Harbors Form W-2 Safe Harbor Rate of Pay Safe Harbor Federal Poverty Line Safe Harbor 30 10

11 Optional Look-Back Method To determine full-time and part-time status of variable hour, seasonal, and part-time employees Can be used only for penalty calculation 31 Determining Full-Time Employee Status Lookback measurement method Only for purposes of determining and calculating liability for penalties. Monthly measurement method Used to determine if employer is covered and may be used to determine and calculate penalties. 32 Collapsing of Commonly Owned or Affiliated Employers 33 11

12 What IRS Said About Home Care No exemptions for home care Home care workers might not be employees of the agency Do not rely on this 34 Relief for Employers Covered in 2015 Must offer coverage to at least 70% of full-time employees in order to avoid penalty assessment Must offer coverage to at least 95% of full-time employees in 2016 and thereafter 35 Transitional Relief for 2015 (There Are Others) Non-Calendar Plans Offer of Coverage for 2015 Coverage for Dependents 36 12

13 Seasonal Employees Stated rules for seasonal employees which could be helpful for agencies in some parts of the country Means an employee in a position for which the customary annual employment is 6 months or less and begins each year at approximately the same time. 37 How Penalties Will Be Assessed and Must Be Paid 38 Information Reporting to IRS 39 13

14 Observations Penalties are based on full-time employees, not on FTEs. Even if subject to the mandate, an employer will never pay a penalty if it has 30 or less full-time employees for the month involved. 40 What Agencies Need to Do Now Keep accurate count of hours of service Should you hold caregivers under 30 hours per week? Stay in contact with your insurance advisors 41 What Agencies Need to Do Now Remember that insurance premiums are a deductible business expense, but penalties are not. Be careful who you obtain advice from Do not plan for the employer mandate to be amended or repealed

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