PAY OR PLAY –
TIME TO ACT
Bob Blum
Hanson Bridgett LLP
Hanson Bridgett LLP
April 2, 2013
©Hanson Bridgett LLP
Talk To Your Lawyer
Talk To Your Lawyer
• This
This presentation is a general discussion of the presentation is a general discussion of the
pay or play rules based on proposed regs
• It is not legal advice
It is not legal advice
• Each agency’s situation will differ and the facts f
for each agency will determine your situation
h
ill d
i
i
i
• Talk to your lawyer about your situation
• Do it soon.
2
For Discussion
For Discussion
•
•
•
•
•
•
•
What is Pay or Play What
is Pay or Play
Strategy – first actions to take
Pay or Play boundaries
l b
d i
Compare your program to boundaries
Particular issues
IRS
Time line
3
The Congress expects IRS to get g
p
g
$13 Billion from “Pay” in FY 2013 2014
FY 2013‐2014
4
PEMHCA
• PEMHCA does not let you off the hook does not let you off the hook
• PERS does not have all the information needed for you to comply with pay or play
needed for you to comply with pay or play
• Each agency must have its own records about each of its employees
h fi
l
• Each agency must report to the IRS and be ready to answer the exchange
5
Basic Information Needed
Basic Information Needed
Are you are “large” so are subject to pay or play
Who is “full time”
The actual hours worked for each employee How you will measure average hours worked How you will deal with new hires in determining full time status
What coverage is offered to each full time employee
The value of that coverage
The cost of the coverage to each employee compared to his/her earnings
• Whether you are subject to either of 2 tax penalties
• Whether you are better off paying penalties
• How you will report the required information to the IRS and others
•
•
•
•
•
•
•
•
6
WHAT IS “PAY”
7
Are You Subject To P or P?
Are You Subject To P or P?
• Every large employer large employer – public, private, public private
nonprofit
• Large Large
– Average 50 FTE in prior year
– Full time = average 30 hours/week or 130/month
F ll i
30 h
/
k 130/
h
• May be hard to avoid
8
Avoid Being “Large”?
Avoid Being Large ?
• Hard to avoid by Hard to avoid by “workforce
workforce management
management”
–
–
–
–
Hold all to less than 30 hours?
Scheduled? Actual?
Increased your workforce?
All hours counted, divided by 120 = FTEs/month ,
y
/
•
Special rules for seasonal, etc.
• Are you part of a “controlled group”?
• For today, assume all are large and subject to pay or play
9
Pay
• Must
Must offer coverage to 95% of your full
offer coverage to 95% of your full‐time
time (FT) employees (and kids under 26) or pay penalties
• Two possible penalties (not both)
A ‐ $2,000/year for every FT employee (minus 30) A
$2 000/
f
FT
l
( i
30)
whether or not you offer coverage to any
B $3,000/year for every FT employee not offered B ‐
$3 000/year for every FT employee not offered
affordable, minimum value coverage, if they receive a federal subsidy through an exchange
a federal subsidy through an exchange
10
A or B Penalty
A or B Penalty
A ‐ O
Offer minimum coverage to 95% of FTs
e
u co e age to 95% o s o
or pay
pay
–
–
–
–
To employee and kids under 26
Minimum Essential Coverage (MEC) required No limit on premium charged
“Pay” = $2,000/yr for every FT (minus 30)
B ‐ Offer “affordable”, “minimum value” or pay
– Affordable premium = 9.5% of income
– Minimum value = 60% of costs
Mi i
l
60% f
t
– “Pay” = $3,000/yr for every FT not offered this who gets a federal subsidy through an exchange
gets a federal subsidy through an exchange
11
Examples
• The A penalty
e pe a ty
– 200 full time employees (determined per regs)
– You pay for coverage for 180 employees & kids
– $2,000 X (200‐30) = $340,000 penalty due to IRS
• The B penalty
– 200 full time employees
– Coverage is offered to 192 employees & kids
– Coverage for 30 of the 192 is not “affordable”; 38 C
f 30 f th 192 i
t “ ff d bl ” 38
receive exchange subsidy
– Penalty is $3,000 X 38
Penalty is $3,000 X 38 = $114,000 penalty due to IRS
$114,000 penalty due to IRS
12
Overriding Rule Re “Pay”
Overriding Rule Re Pay
• If
If none of your employees gets a subsidy from none of your employees gets a subsidy from
an exchange, no penalties are due
– If one employee gets a subsidy –
If one employee gets a subsidy – proper or not –
proper or not –
the IRS will contact you
– Be prepared for the IRS
Be prepared for the IRS
– Whatever your circumstances
– There will be errors by the exchange and IRS
There will be errors by the exchange and IRS
– Records are your best defense
13
Who Can Get Subsidy
Who Can Get Subsidy
• Subsidy
Subsidy available if you have income less than available if you have income less than
4X the federal poverty line
• 2 person family –
2 person family income up to $62,040 (2013)
income up to $62 040 (2013)
• 4 person family – income up to $94,200
• 6 person family – income up to $126,360
14
Enforced By IRS
Enforced By IRS
• Annual report by each employer to IRS Annual report by each employer to IRS
– Includes: substantial information including name, address SSN of every full time employee with address, SSN
of every full time employee with
coverage and months of coverage
• Annual information to each FT employee
Annual information to each FT employee
• Information by Exchange to IRS
– IRS will use as basis for penalties
IRS ill
b i f
lti
– Employer can challenge; will need records for this
15
Urgency for Action ‐ Records
Urgency for Action • Effective 1/1/2014 for calendar year plans
Effective 1/1/2014 for calendar year plans
– Special rule for fiscal year plans
• 2013
2013 employee status drives 2014 obligation
employee status drives 2014 obligation
• Need to decide 2014 strategy ASAP
• Whatever the strategy, you need 2013 records to support it (and to deal with IRS)
– 2013 records require programming
– Often, not easy and takes time
y
16
HOW DO YOU KNOW IF YOU CAN PLAY
17
FIGURE OUT YOUR CURRENT SITUATION
• You
You provide health benefits now to provide health benefits now to
“benefited” employees
• You do not want to both provide benefits AND You do not want to both provide benefits AND
pay the A penalty
• Maybe you are OK paying the B penalty
M b
OK
i
h B
l
• What do you need to do?
18
Actions
Figure out your plan year and effective date
Figure
out your plan year and effective date
Take stock of coverage
Compare to “boundaries”
Compare to boundaries in ACA
in ACA
Decide on plan/HR changes to make
D id h
Decide how you will demonstrate compliance ill d
t t
li
to the IRS
• Decide on IT/payroll changes to make
D id
IT/
ll h
t
k
• Set timeline for actions
•
•
•
•
•
19
Determine Your Plan Year
Determine Your Plan Year
• Do
Do you have a calendar year plan or fiscal year you have a calendar year plan or fiscal year
plan?
• If you have a fiscal year plan, 1/1/2014 may If you have a fiscal year plan 1/1/2014 may
not be the effective date and you have more time
20
Fiscal Year Plan
Fiscal Year Plan
• Plan
Plan in effect on December 27, 2012
in effect on December 27 2012
• No penalties due for periods before first day of 2014 plan year for employees eligible for
of 2014 plan year for employees eligible for coverage as of the first day of the fiscal year under the terms of the plan on 12/27/12
under the terms of the plan on 12/27/12
21
Take Stock of Your Current Program
Take Stock of Your Current Program
•
•
•
•
•
•
•
What employees have coverage?
What
employees have coverage?
What employees do not have coverage?
What coverage is offered?
What coverage is offered?
When do employees get coverage?
Wh d th l
When do they lose coverage?
?
What do they pay for it?
What children are offered coverage and at what cost?
22
Taking Stock
Taking Stock
• Be careful and precise re who is Be careful and precise re who is “benefited”
benefited
• Based on job position?
• Based on Based on “schedule”
schedule or or “actual”
actual
– Hours? Days? Months?
– How measured?
How measured?
– What if actual greater than scheduled?
• What
What happens with change in status? When happens with change in status? When
determined?
• What errors have occurred What errors have occurred – when and why?
when and why?
23
Taking Stock (2)
Coverage and Tracking of ‐‐‐
d
k
f
•
•
•
•
•
•
•
•
•
Part time
Temporary
Seasonal
Short service
High turnover
On call and fill in
Contractors
S ffi
Staffing agency employees
l
Former employees who return
24
Taking Stock (3)
Kids
d
• What
What coverage is offered to children under coverage is offered to children under
26?
– Natural children
Natural children
– Adopted children
– Step children
Step children
– Foster children
25
Taking Stock (4)
MOUs
• What
What do your MOUs
do your MOUs provide for coverage, provide for coverage
premiums, etc.?
• There are no special rules for represented There are no special rules for represented
employees and collective bargaining agreements
– There is no delayed effective date
– There is no exception to the penalties
Th
i
i
h
li
26
Taking Stock (5)
Records
d
• How
How do you determine who is benefited and do you determine who is benefited and
who is not
• What records are used?
What records are used?
– Payroll hours; pension service; position filled?
• If hours/service
/
– How are these counted?
– How timely is the data?
27
PAY OR PLAY BOUNDARIES ‐‐
PAY
OR PLAY BOUNDARIES
AVOIDING “B” AND
AFFORDABLE COVERAGE
28
Affordable Coverage
Affordable Coverage
• Self‐only
Self only (employee only) is no more than (employee only) is no more than
9.5% of income
– No cap on cost for kids
No cap on cost for kids
• Probably cannot set the premium at 9.5% – Instead, a set premium capped at 9.5%
I
d
i
d 9 5%
29
HSAs and HRAs
and HRAs
• Do employer contributions to HSAs
o e p oye co t but o s to S s aand HRAs
d
s
count for “affordability”?
y
• HSAs – contributions do not count because they may not be used to pay premiums
• HRAs – contributions that may be used only to reimburse medical expenses other than cost of coverage do not count. (Id.) – Fit
Fits with rules for HRA
ith l f HRA and prohibition on annual and d
hibiti
l d
lifetime limits
– “Stand alone” HRAs may be dead
y
30
125 Plan
• No
No specific guidance yet
specific guidance yet
• If HRA will not work then perhaps 125 plan will not work either
will not work either
• Calls into question the PEMHCA strategy of providing lowest possible employer idi l
ibl
l
contribution + 125 plan for actives 31
PAY OR PLAY BOUNDARIES ‐‐
AVOIDING “B” AND
MINIMUM VALUE COVERAGE
MINIMUM VALUE COVERAGE
32
Minimum Value Coverage
Minimum Value Coverage
• Covers
Covers 60% of costs
60% of costs
• HHS plans to provide an MV calculator, and is considering some additional other safe
considering some additional other safe harbors
• Carriers should certify minimum value
Carriers should certify minimum value
– Will PEMHCA, etc. certify?
– Can you rely on them?
y
y
– What if your plan is unique?
• More guidance in the works
o e gu da ce t e o s
33
OFFER TO FULL TIME EMPLOYEES OFFER
TO FULL TIME EMPLOYEES
(
(and kids but not spouses)
p
)
34
Pay or Plan Based on FT Employees
Pay or Plan Based on FT Employees
• Pay
Pay or Play based on FT employees
or Play based on FT employees
• Full‐time is based on hours of service, generally averaged over time
generally averaged over time
• How does your program fit with the b
boundaries?
d i ?
• What changes are needed & can be made with the least disruption?
35
What is Full‐Time
What is Full
Time
• Average of 30 hours/wk
of 30 hours/wk or 130 hours/month
or 130 hours/month
• You choose the period over which averaged
– One month O
th
– Longer (3 – 12 months) • If you choose one month, employees can flip in and out of full‐time & coverage
• The longer the period to average the longer the subsequent coverage period
36
Counting Hours
Counting Hours
• FT
FT is an average of 30 hours/week or 130 is an average of 30 hours/week or 130
hours/month over the MP
• Hours are counted similar to but not the same Hours are counted similar to but not the same
as ERISA
• Hourly: count hours
H l
h
• Non‐hourly – count hours, or 8 hrs/day, or 40 hrs/wk
37
Hours – Specifics Hours Specifics ‐1
1
• Generally
Generally Include: vacation, illness, incapacity, Include: vacation illness incapacity
layoff, LOA
• Special treatment: maternity/paternity leave; Special treatment: maternity/paternity leave;
military leave; FMLA, jury duty – may exclude when averaging or credit at prior average rate
when averaging or credit at prior average rate
• Unclear: hours for periods of no service when not based on units of time; back pay; faculty
b d
i f i
b k
f l
38
Hours – Specifics Hours Specifics ‐ 2
• Equivalencies
Equivalencies only available for non
only available for non‐hourly
hourly • All ERISA equivalencies not available and 4980H equivalencies not same as ERISA
4980H equivalencies not same as ERISA
– E.g., not 10 hrs/day but 8 hrs/day
– Not 45 hrs/wk
N 45 h / k but 40 hrs/wk
b 40 h / k
– Not able to use monthly or other ERISA
equivalencies
i l i
39
MEASURING “AVERAGE” HOURS FOR FULL TIME
FOR FULL TIME
40
Basics For Determining FT
Basics For Determining FT
• Average over the period you choose
Average over the period you choose
– One month
– Longer (
Longer (“lookback”
lookback period)
period)
• What is the effect of measuring over a period l
longer than one month
th
th
• How does measurement period fit with open enrollment
• What do you measure 41
Measurement & Stability Periods
Measurement & Stability Periods
• If
If you measure FT over 3
you measure FT over 3‐12
12 months, the period months the period
chosen is a “measurement period” or MP
• Each MP has a corresponding Each MP has a corresponding “stability
stability period or period or
“SP” for offering coverage
– Even
Even if the employee is not FT in the SP, coverage must if the employee is not FT in the SP coverage must
be offered in that SP
• MPs 6 months or less must have SPs of 6 months
• MPs longer than 6 months must have equal SPs
42
Simple MP and SP examples
Simple MP and SP
• The
The MP is 3 months so the following SP
MP is 3 months so the following SP is 6 is 6
months
• The MP is 5 months so the SP
The MP is 5 months so the SP is 6 months
is 6 months
• The MP is 9 months so the SP is 9 months
• The MP is 12 months so the SP is 12 months
43
Measurement and Administration
Measurement and Administration
• If
If the period of coverage immediately followed the period of coverage immediately followed
the MP, there would be no time to
– Notify the employee of coverage availability
Notify the employee of coverage availability
– Let the employee make health care elections
– Implement payroll changes for premium deductions
p
p y
g
p
• An “administrative period” or “AP” is available before coverage must be offered
g
– Up to 90 days after the end of the MP
– Can fit with open enrollment
p
44
Example – 12 Month MP
Example 12 Month MP
• You
You choose 12 months for administrative choose 12 months for administrative
simplicity
– Fits with one open enrollment per year
Fits with one open enrollment per year
– If 6 months, could need 2 open enrollments/year
• MP (measure) Oct 15 –
MP (
) O t 15 Oct 14
O t 14
• AP (admin) Oct 15 – Dec 31
• SP (offer of coverage) Jan 1 – Dec 31
45
12 Month MP Effects
12 Month MP Effects
• One
One period to measure
period to measure
• One open enrollment for ongoing employees
• Any employee who is FT as of Oct 15 (based l
h i
fO
(b d
on prior MP) is FT for the next Jan 1‐ Dec 31 regardless of any change in status
dl
f
h
i
– Note: you might be able to increase the premium cost to an employee who changes, e.g., to part l
h h
time subject to possible B penalty
46
Payroll Periods
Payroll Periods
• The rules work in “months”
e u es o
o t s
• Yet you can use payroll periods to measure hours
– Figure out the MP using months
g
g
– Then start with the first payroll period that ends in the MP and end w/ the last payroll period that ends in the MP
– Or, use the first that starts in the MP and ends after the MP
• Only for these payroll periods: one week, two weeks, semi‐monthly
47
Example – Payroll Periods
Example Payroll Periods
• MP
MP is Oct 1 is Oct 1 – Sept 30
Sept 30
• Option 1 – use the first payroll period that ends after Oct 1 and ends before Sept 30
ends after Oct 1 and ends before Sept 30
• Option 2 – use payroll period that starts after O 1 d h
Oct 1 and the payroll period that includes Sept ll
i d h i l d S
30
48
Special Transition Rules
Special Transition Rules
• MP
MP for 2013
for 2013‐ may use 12 month SP
may use 12 month SP and 6 and 6
month MP but must start by 7/1/13
• Do not have to cover kids
Do not have to cover kids for 2014; only for 2014; only “take
take steps” in 2014 to establish coverage
• In 2014 only, may take into account In 2014 only, may take into account
expectation that new employee will work for short time • But even after 2014 may treat “seasonal” as working for short time
49
SPECIFIC ISSUES ‐ MEASUREMENT
50
Re Hires
Re‐Hires
• A re
A re‐hire
hire may be treated as a new employee if
may be treated as a new employee if
– There are 26 consecutive wks of no hours/svce, or
– A break in svce
A break in svce is at least 4 wks
is at least 4 wks long and is longer long and is longer
than the immediately preceding period of service (e.g., 6 wks of service, 7 wks
(e.g., 6 wks
of service, 7 wks of break)
of break)
• If not “new”, then the individual’s MP and SP
periods pre‐break
periods pre
break continue to apply as if there continue to apply as if there
was no break
51
New Hires and FT
New Hires and FT
• If “reasonably expect” that new hire will be 30 y p
hours/wk then must offer coverage within 90 days
• If not “reasonably expect” will be FT, then If not “reasonably expect” will be FT then
variable employee rules apply
• Facts that show Facts that show “reasonably
reasonably expect
expect”?? –
–
–
–
–
Position description
Experience in same or similar job
Recruiting material
Offer letter/agreement
Actual work
Actual work
52
New Hire ‐ Not FT
New Hire Not FT
• Need to determine if average 30 hours/wk
Need to determine if average 30 hours/wk
• Use new hire MP, not the “standard” MP
– Choose MP (at least 3 mos; not more than 12)
Ch
MP ( t l t 3
t
th 12)
– Start MP no later than first of month after hire
– Establish SP, no less than 6 mos
– May use AP after MP
– Shift to standard MP, SP after one full standard MP has passed
53
Example – New Hire Not FT
Example New Hire Not FT
• Hired
Hired 2/15/14; new hire MP is 6 months; MP 2/15/14; new hire MP is 6 months; MP
begins 3/1/14; new hire SP is 6 months
– Averages fewer than 30 hours/wk
Averages fewer than 30 hours/wk – not FT so not not FT so not
counted for A or B penalty for SP of 9/1/14 –
2/28/15
/ /
– Averages 30 hours/wk – is FT; counted for A and B penalty for SP of 9/1/14‐2/28/15
• Note: prop’d regs are unclear on key issues re MP and SP for variable new hires
MP and SP
for variable new hires
54
Independent Contractors or Employees?
l
• There
There is more at stake now re is more at stake now re “contractors”
contractors
• The common law test is used to determine “employee”
employee in pay or play
in pay or play
• A close scrutiny of status could trigger the A or the B penalty
h B
l
– For B – get indemnification? And for A?
– Use of a staffing agency may not help
– The “leased employee” rule may not help
55
3 Month Exemption
3 Month Exemption
• No
No coverage must be offered for 3 months coverage must be offered for 3 months
from employment hire date, even for FT
– No
No penalties during first 3 months of penalties during first 3 months of
employment
– Months are not calendar months but determined Months are not calendar months but determined
based on first date of service
56
DO YOU STILL WANT TO PLAY?
57
What If You Do Not Play?
What If You Do Not Play?
•
•
•
•
•
No tax
No
tax‐free
free coverage for employees
coverage for employees
Still must keep records
S ill
Still must report to IRS every year
S
Could affect recruit and retain
Employees could demand more cash
58
COMPARE THE RULES TO COMPARE
THE RULES TO
YOUR PROGRAM AND DECIDE ON CHANGES (IF ANY)
FOR “A” PENALTY
59
Compare Coverage Offered to Boundaries –
d
A Penalty
l
• Are all
Are all of your employees benefited?
of your employees benefited?
– Not a single exception?
– Coverage offered w/in 90 days?
Coverage offered w/in 90 days?
– Coverage for kids to 26 also?
– Then, no A penalty
Th
A
lt
60
Who Is Benefited?
Who Is Benefited?
• What is your requirement for benefited?
What is your requirement for benefited?
– 20 hours scheduled? 25? 30? More?
– Minimum # of cumulative hours worked?
Minimum # of cumulative hours worked?
– Position filled
• YYour risk of missing the 95% requirement i k f i i th 95%
i
t
depends on the standard for benefited
– Is it easy to go over the ACA FT rule?
– Does your definition fit at all with the ACA rule?
61
Program vs. Boundaries (1)
Program vs. Boundaries (1)
• Do you have any
Do you have any non
non‐benefited
benefited employees?
employees?
– Who are they?
– How many, month by month for the past 12 months?
How many, month by month for the past 12 months?
– Do they ever work over 30 hours/week (130 hours/month)?
– How do you know – how do you keep track?
• Is it possible that more than 5% of your FT are p
y
not benefited?
– If not, what could change and how fast?
62
Program vs. Boundaries (2)
Program vs. Boundaries (2)
Do you ever
Do
you ever hire:
• Regular part time who work more than scheduled [how do you keep track?]
scheduled [how do you keep track?]
• For a short time project that goes longer than expected [who keeps track?]
d[ h k
k?]
• On call/fill in who ever work 30+ hours/week
• Contractors who are not really “independent”
63
Program vs. Boundaries (3)
Program vs. Boundaries (3)
• Do
Do you ever
you ever have a waiting period of more have a waiting period of more
than 3 months from first day on payroll?
– E.g., hire, leaves after a month, comes back after a E g hire leaves after a month comes back after a
month? What is the waiting period?
• Do
Do you offer coverage to every child (w/in the you offer coverage to every child (w/in the
ACA definition) younger than 26?
64
Program vs. Boundaries (4)
Program vs. Boundaries (4)
• Based
Based on your current records and data, what on your current records and data what
can you prove to the IRS re FT status of each employee for each month for the past 12+ employee for each
month for the past 12+
months?
65
Program vs. Boundaries (5)
Program vs. Boundaries (5)
• If
If you are completely sure that none of these you are completely sure that none of these
potential outliers exist, or they are well short of 5% of total FTs then no change is needed
of 5% of total FTs, then no change is needed for the A penalty
• If not completely sure, then you may wish to If not completely sure then you may wish to
consider some changes to avoid the A penalty
66
Possible Strategies for Change –
A Penalty
l
• Offer to more employees
O e to o e e p oyees
– Does not have to be the same as to benefited, only has to be minimum essential coverage
– Do not have to pay anything toward cost; can be totally employee paid
– Can be targeted
Can be targeted
– Upside – avoid A penalty; downside – adverse selection
– Be sure you cover kids
– Watch out for special issues (discussed later)
67
COMPARE THE RULES TO COMPARE
THE RULES TO
YOUR PROGRAM AND DECIDE ON CHANGES (IF ANY)
FOR “B” PENALTY
68
Program vs. Boundaries
Program vs. Boundaries
• For those who have coverage
For those who have coverage
– Is it affordable?
– Does it provide minimum value?
Does it provide minimum value?
• If either answer is “no”, then B penalty applies
– Note can avoid A penalty by not offering to 5% but B penalty can be owed for that same 5%
69
B Penalty Strategy
B Penalty Strategy
• Depending on cost and HR
epe d g o cost a d
goals, an appropriate goa
s, a app op ate
strategy may be to
– Avoid A penalty by expanding offering at full cost
– Pay B penalty instead of subsidizing coverage
• For example
– Currently you may pay non‐benefited more cash and that may be best for employer and employee
– While adjustments may be needed with the B penalty, While adjustments may be needed with the B penalty
still it may be less costly than providing subsidized coverage
70
Plan Document
Plan Document
• Often
Often there is no plan document, but only an there is no plan document but only an
SPD and contract with carriers
• A plan document can be very useful if you Play
A plan document can be very useful if you Play
– Guide for administration/ programing – Guide for responding to employees and regulators
G id f
di
l
d
l
– Maybe could help in correction of errors?
71
RECORDS – IRS – EXCHANGE
PROCESS FOR PENALTIES
PROCESS FOR PENALTIES
72
IRS Process ‐ Generally
IRS Process • Employee gets exchange coverage Employee gets exchange coverage
– Exchange determines if credit applies
• IRS contacts employer
IRS contacts employer
– After employee’s individual tax returns are due
– After the employer files its information return
• At that time, employer needs to show that neither A nor B apply
73
IRS Records Will Be Inaccurate
IRS Records Will Be Inaccurate
• HHS acknowledges that the information acknowledges that the information
exchanges will have for providing credits will not be accurate
not be accurate
• There will be some attempt – how much is not clear to do timely checks with employers
clear‐
to do timely checks with employers
• Clearly, though, wrong information will be passed on to the IRS
d
h IRS
• This will bring IRS questions to employers
74
Records For The IRS
Records For The IRS
• The
The only way to counter an IRS claim is to have only way to counter an IRS claim is to have
the needed records
– Who
Who is FT
is FT
– Who was offered coverage and when
– What was the coverage; the cost to the employee; g ;
p y ;
why was it “affordable”
• If “pay” was the decision, employer still needs to p y
p y
be able to show the number of FT every month
p y p y
• Records are needed whether pay or play
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OTHER MATTERS ‐‐
NON‐DISCRIMINATION,
CADILLAC TAX
CADILLAC TAX
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POTENTIAL 2013 TIME LINE
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Key Tasks
Key Tasks
•
•
•
•
Take stock of your current program
Take
stock of your current program
Compare to boundaries
Determine risk if any for A or B penalties
Determine risk, if any, for A or B penalties
Decide basic strategy for program
– E.g., Play/ pay? Risk level? Risk reduction?
E g Play/ pay? Risk level? Risk reduction?
• Evaluate current records vs. records needed
• Implement record keeping changes
I l
t
dk i
h
• Prepare for next open enrollment
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Possible Benchmark Dates ‐ 2013
6 Month MP and 12 Month SP
h
d
h
•
•
•
•
•
•
•
•
Create team: Finance, HR, IT, Legal Create
team: Finance, HR, IT, Legal – Jan/Feb
Take stock and compare to boundaries – Feb
Determine basic strategy ‐ March
Determine basic strategy ‐
Program recordkeeping ‐ ASAP
M
Measure FT –
FT April 15 ‐
A il 15 Oct 14
O t 14
Determine FT eligible – Oct 15 ‐ Oct 31
Open Enrollment – Nov 1 – Nov 30
First Stability Period – Jan 1 ‐ Dec 31, 2014
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Key Message
Key Message
START WORK NOW
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Questions?
Email [email protected]
il
l @h
b id
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