UPDATE ON ACA
Transition Relief for 2014
The IRS issued Notice 2013-45 Transition Relief for 2014 regarding:
 Information reporting by insurers and self insureds.
 Penalty for failure to meet employer shared responsibility.
Delayed - Information Reporting
 Large employers reporting related to health insurance offered/not
offered to full time employees.
 Insurers and self insuring employers regarding minimum
essential coverage.
 Purpose of delay is to provide additional time for
employer/reporting entities to provide the IRS input as to
regulations for reporting information.
 Translation: IRS does not know what to do.
Penalties Delayed
 Penalty for failure to offer required coverage to employees who
work on average 30 hours or more per week.
 Penalty if essential benefits, affordability and minimum value are
not in compliance.
It is assumed that the major insurance providers will be
giving guidance regarding compliance with coverage and
Summary of Benefits and Coverages.
What Employer ACA requirements
remain effective in 2014?
 Summaries of Benefits and Coverage must be distributed during
open enrollment for the 2014 coverage period and must indicate
whether the plan provides minimum value.
 Exchange Notices: Employers must distribute “health insurance
marketplace” notices to all employees by October 1, 2013, and
thereafter to new employees upon hire.
 Employers will be required to complete a 12 page form entitled,
“Application for Health Coverage and Help Paying Costs” when
requested by employees who are applying for advance premium
tax credits when purchasing coverage on the “ health insurance
marketplace.”
ACA requirements continued
 Employers must continue to report the aggregate value of health
coverage on Forms W-2.
 New hire waiting period for health care benefits limited to no
longer than 90 days.
 No pre-existing condition limitations permitted in plan design.
 Required coverage of clinical trials.
 Wellness programs must comply with 2014 standards.
 Essential Benefits.
Employer Shared Responsibility
 Essential Benefits: Employer must offer essential
coverages to full time employees or full time equivalent
employees.
 Affordability: Employer must offer affordable coverage (the
employee’s share of the coverage cost cannot exceed
9.5% of the employee’s household income).
 Minimum Value: Although this requirement is waived,
employer must still report whether a plan provides minimum
value on the Summaries of Benefits and Coverage.
Employer Fees in 2014
 ACA Fee: Patient-Centered Outcome Research Institute Fees
(“PCORI Fees”). The fee will be used to fund comparative
effectiveness research. Beginning 2014 the fee will be $2.00 per
participant per year indexed until 2019.
 Reinsurance Assessment Fee – The revenue from this fee will
be used to stabilze premiums in the individual market for 20142016. The fee for 2014 is $63.00/year or $5.25 /month per
covered life. The estimated fee amounts after 2014 are $42/year
(2015) and $26.25 (2016).
Employer Mandates - 2015
 Beginning January 1, 2015 Employers with 50 or more
employees must offer health care to all full–time or full-time
equivalent employees.
 Insurance must provide minimum essential coverage, minimum
value and affordability.
 A penalty of $2,000 per employee minus the first 30 employees
for failure to offer health care to at least 95% of eligible full time
employees.
 An employer that offers coverage to at least 95% of it’s
employees will be assessed a penalty of $3,000 per employee if
an eligible employee receives a premium tax credit or subsidy
and obtains coverage through a state exchange because the
coverage offered is deemed unaffordable or fails to provide
minimum value.
Determining Full Time
Employees
 All current full time employees as determined by the employer.
Generally those employees are already receiving health care
benefits.
 Other employees who average 30 hours worked per week
including paid time off (PTO) e.g. vacation, holiday, illness and
leave of absence, etc.
• Hourly employees = actual hours worked plus PTO
• Adjunct faculty = actual worked plus PTO
Employer Measurement Period
 Used to determine average hours worked for the Employer.
Records must be kept to assist in determining full time status.
 Employers may want to plan on an anticipated required 12-month
Standard Measurement Period commencing November 1, 2013.
 Effective January 1, 2015 you must meet all employer mandates
or pay penalties.
Unresolved Issues
 Method of calculating Adjunct hours worked must be “reasonable” to
be determined by the Employer.
 IRS has determined that it would NOT be reasonable to only count
classroom hours or other instruction time and to not include other
duties such as class prep time, grading or required tasks outside of
the classroom.
 There is debate concerning class time, credit hours, contact hours,
equated hours and how it should be calculated as hours worked
taking into account the tasks outside the classroom: 1:1, 1:2 and 1:3
or a variant.
 The IRS may ultimately establish a mandatory calculation.
Things To Watch For…..
 Non-teaching employees in multiple positions.
 Adjunct faculty in multiple positions: credit, non-credit or non
teaching capacities.
 Adjunct faculty and substitute teaching.
 Independent contractors determined to be employees.
 Inherent conflict between ACA and Act 152 of 2011.
RESOURCES
www.fas.org
www.healthcare.gov. - health reform information
http://www.irs.gov/uac/Affordable-Care-Act-TaxProvisions-Home
www.cms.hhs.gov - essential benefits
www.dol.gov/ebsa/healthreform - exchange notice