affordable care act?€¦ · can you afford the affordable care act? what you need to know to plan...

Employment, Benefits and Labor Briefing: Practical Solutions to New Trends and Developments in Employment Law

© Blank Rome LLP 2013. All Rights Reserved1

Can You Afford The Affordable Care Act? What You Need to Know to Plan for 2014

Presented by

Barry L Klein Blank Rome LLP

#EBLTrends; @BlankRomeLLP

Barry L. Klein, Blank Rome LLP

Gus Sandstrom, Blank Rome LLP

Kari Knight Stevens, Cigna

142 #EBLTrends; @BlankRomeLLP



Employer Excise Tax –“Shared Responsibility Payment”“Applicable Large Employer” (50 or More Full Time Employees or FT Equivalents in Previous CY)?

Offers Opportunity to Enroll in Group Health Plan for All Employees and Dependents?

Has At Least 1 FTE Been Certified to Employer as Enrolling

“Affordable” and Provides “Minimum

Value”?

NoN

Y Y

N

YN

N


Employer Subject to TaxExempt

Has At Least 1 FTE Been Certified to Employer as Enrolling in Coverage Purchased out of Exchange and Received “Premium Tax Credit” or “Cost Sharing Reduction”?

Y

N

Determining Amount of Excise Tax

Sponsor GHP For All FTEs and Dependents?

YN

(#FTEs ‐ 30)Lesser of • (# Certified FTEs) x $3000

YN


x $2000 • (#FTEs ‐ 30) x $2000



Eligibility For Premium Tax CreditIs Household Income 100% ‐ 400% of Federal

Poverty Line For Applicable Family?

If Married, Does Individual File a

Y

N

NIf Married, Does Individual File a

Joint Return?

Does Individual, Spouse or Dependent Purchase Coverage on a State Exchange?

Does Individual Pay Premium For The Coverage?

Y

Y

Y

N

N


Is Individual Eligible Under Governmental Plan, Grandfathered

Plan or Affordable Employer Plan That Provides Minimum Value?

YFor Employer Plan, Employee Pmt Less

Than 9.5% Household Income (W‐2) and Employee’s Cost

Share Less Than 60%?

Y

N

Eligibility For Premium Tax Credit

di id l dY

Is Individual Covered By AnEmployer Plan?

Is Individual A Dependent onAnother Tax Return?

Y

N

N

Y


Not EligibleEligible



Lesser of:

• Amount Actually Paid For Coverage; or

Amount of Premium Tax Credit

• Amount Actually Paid For Coverage; or

• Excess of the Cost of a Mid‐Range Plan in the Exchange over the “Applicable Percentage” of Household Income

“Applicable Percentage” Is A Sliding Scale Percentage From 2% to 9 5% Based on Household Income


2% to 9.5%, Based on Household Income

• Applicable Large Employer

– Any Employer with 50 or more full‐time or full‐time equivalent

Key Terms

– Any Employer with 50 or more full‐time or full‐time equivalent employees during the preceding calendar year

• Full‐Time Employee (FTE)

– An employee who works, on average, at least 30 hours per week or 130 hours per month

– Use Common Law Test


• Full‐Time Equivalent Employees

– Aggregate number of hours of service for all employees that are not full‐time/120



Public E change

Employer Options

2014 Individual & Small Group2017 + Large Employer

TraditionalModel

PrivateMulti-ProviderExchange for

Group

Exchange

Employee Health Care

Employer‐Selected Benefit Plans (insured or self funded) withCost‐sharing


Private Single ProviderExchange for

Group

Defined ContributionPlan Offerings Decided by Exchange

Defined ContributionPlan Offerings Decided by Employer

Employer Strategies

Opt

Out & Drop

Coverage

Encourage

Employee

Wellness &

Productivity Only

Limited Costs with Limited Oversight

Limited Costs with High Oversight

Change Employee Behaviors through Health & Wellness

Incentives

Traditional Health Benefits are

Fundamental to our Compensation Practices and

Business Values

<<<<<Level of Employer Oversight and Control >>>>


PAY‐‐‐‐‐‐‐‐‐‐‐‐‐‐MODIFIED PAY‐‐‐‐‐‐‐‐‐‐‐‐‐MODIFIED PLAY‐‐‐‐‐‐‐‐‐‐‐‐‐‐PLAY



Who are our full‐time employees?

Employer Considerations

What is our exposure?

Do our plans provide

minimum value?

Should we incentivize

healthy behaviors and

outcomes?

Is our coverage

affordable for all full‐

time employees?

What is our company

culture toward health?


Can we minimize penalties

through new workforce strategies?

How can we communicate

and engage with our employees?

Courting Healthcare:New Litigation Risks Under the ACA

ERISA Litigation


Whistleblower Claims



• Breach of fiduciary duty class actions

“G df th i ” h ll

Courting Healthcare:ERISA Litigation Under the ACA

• “Grandfathering” challenges

• Compliance with coverage mandates

• External review procedure claims

• Fiduciary liability for Independent Review Organizations

• Is there a deferential standard of review?


• Health insurance exchanges

• Employer reporting and disclosure obligations?

• ACA creates significant whistleblower rights

– “Reasonably believes” standard

Courting Healthcare:Whistleblower Claims Under the ACA

– Reasonably believes standard

• Claim procedures

– 180 days to file a complaint with OSHA

• Temporary reinstatement on “reasonable cause”

• Final order within 120 days; right of appeal to federal court

– Statute prohibits arbitration


Statute prohibits arbitration

• Burden‐shifting framework

– Employee: “Contributing factor” to adverse decision

– Employer: “Clear and convincing evidence” standard

affordable care act?€¦ · can you afford the affordable care act? what you need to know to plan...

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