affordable care act/ hb 1059

1

Affordable Care Act/HB 1059

NDPERSSeptember 2014

Today’s Agenda

• Review of ACA Requirements & Changes in State Law for PERS

• Implementation Considerations

• ACA Q&A• ACA New Hire Eligiblity

Process• ACA Reporting

3

PERS Plan Eligibility today

FTE under State Law• In an approved and

regularly funded position• Working 20 or more hours

per week • Working 20 or more weeks

per year

Temporary Employee• Not in approved and

regularly funded position• Services may or may not be

of limited duration• Working 20 or more hours


per year

4

HB 1059“Section 2 of the bill would amend Section 54-52.1-03.4 of the North Dakota Century Code to modify the uniform group insurance program’s eligibility rules for temporary employees first employed after December 31, 2013, and to limit the amount any temporary employee can be required to contribute towards the cost of coverage. The purpose of the proposed changes is to prevent the State of North Dakota from being subjected to the Employer Shared Responsibility penalties with respect to its temporary employees under the Affordable Care Act. The Shared Responsibility penalty for No Coverage will be $2,000 per FTE per year. This No Coverage penalty will be imposed only if at least one FTE purchases coverage in a Health Insurance Exchange and qualifies for a Premium Tax Credit or Cost-Sharing Reduction.” Testimony of Sparb Collins

5

PERS Plan Eligibility




per year

Temporary Employee• Not in approved and

regularly funded position• Services may or may not be

of limited duration• Working 20 or more hours


per year

6





per year

Temporary Employee• Employees that are full time

employees under the ACA but not under state law

• Working 30 or more hours per week in month (130 hrs) or 1560 hours per year– Not seasonal employees– May include variable hour

employees– Includes any employee that you

reasonable expect to work to work 30 hours per week for a month and is not seasonal

7

HB 1059: Definition of Temporary Employee

Scope of Pre HB 1059 Temp Definition

New HB 1059 Definition

8





per year

Temporary Employee• Employees that are full time employees under

the ACA but not under state law• Working 30 or more hours per week (130 hrs

per month) for a month or 1560 hours per year– Not seasonal employees– May include variable hour employees– Includes any employee that you reasonable

expect to work to work 30 hours per week for a month and is not seasonal

• Cannot charge these employees more than 9.5% of their household income for single coverage but must also provide coverage to dependents

9

State Decisions

• State is 1 Large Employer with 2 Large Employer Members (state & higher ed)

• Initial Measurement Period – 12 month period beginning November 1, 2013 through October 31, 2014

• Affordability Method Selected – Federal Poverty Line

10

Effective date

•Jan 2015

110636

11

State of North Dakota & Political Sub-Divisions Healthcare Reform DiscussionSeptember 24, 2014

110636

Today’s Agenda:

• Affordable Care Act Key Provisions & Timeline

• State of North Dakota & Political Sub Employer Impact

• ACA Readiness Assessment

• Wrap Up

12

110636110371

13

Key Affordable Care Act (ACA) Provisions

Understanding the impact of reform is the first step to developing a benefits strategy that aligns with the emerging market landscape

• Guaranteed Issue/Individual Mandate: All individuals will be able to purchase coverage regardless of health status. All individuals must have minimum essential coverage or penalties may apply.

• Benefit & Cost Sharing Standards: New health plans sold in the small group and individual markets are required to cover the essential benefits and have at least a 60% actuarial value.1 These plans will need to be a “metal tier” plan. Grandfathered plans exempt.

• Public Exchange: Individuals will be able to purchase individual coverage on health insurance exchanges. Small employers can purchase coverage through SHOP.2

• Consumer Subsidies: Individuals with household incomes at or below 400% of federal poverty level (FPL)3 will be eligible for income-indexed premium subsidies, and those below 250% of the FPL will be eligible for cost-sharing reduction for coverage purchased on public exchange.

• Employer “Mandate” (Shared Responsibility): All employers with 50 or more full-time equivalents must provide adequate, affordable health benefits to employees or pay a penalty per full-time employee per year. Coverage must be offered to employees and dependents. (Starts 2015, Transition Relief Rules Apply)

Beginning in 2014

1) Actuarial value = % of total average costs for covered benefits that a plan will cover2) Small Employer Health Options Program3) In 2014, $46,680 for an individual and $95,400for a family of four (source: http://aspe.hhs.gov/poverty/12poverty.shtml)

http://aspe.hhs.gov/poverty/12poverty.shtml

110636

Employer Mandate Summary

14

ACA mandates that Applicable Large Employers offer minimum value and affordable coverage to applicable percentage of full-time employees working an average of at least 30 hours/week (130 hours/month) or pay a penalty of up to $2,000/Full-Time employee (All FT employees) annually minus first 30 (minus 80 in 2015). Employer can also be penalized annually up to $3,000/Full-Time employee for individual employees whose premium contributions exceed 9.5% of wages and/or the plan covers less than 60% of health care expenses. • Employers with <50 FTEs are not required to offer coverage to any employees.• Employers with 50-99 FTEs will report & certify in 2015 and offer coverage to 95% of full-

time employees in 2016. Not required to meet mandate in 2015.• Employers with 100+ FTEs offer coverage to 70% of full-time employees in 2015 and 95%

in 2016.

Legal and Tax Advice and Compliance Disclosure: The information provided in this document is not intended to advise any company on how it may comply with any provisions of the referenced law or regulations, nor is it otherwise intended to impart any legal or tax advice. If you have any questions about how to comply with this or any other law or regulation, we recommend that you consult with appropriate legal and tax experts.

<50 FTEs• No Mandate

50-99 FTEs• 2015 Report/Certify• 2016 Mandate (95%)

100+ FTEs• 2015 Mandate (70%)• 2016 Mandate (95%)

110636110371

15

ACA Timeline

9/1/2014 1/31/2016

10/1/2014 1/1/2015 4/1/2015 7/1/2015 10/1/2015 1/1/2016

Today

11/15/2014 - 2/15/20152015 Individual

Open Enrollment 1/31/2015W-2 (250+)

1/1/2015Large

Employer Mandate

(Transition Relief)

1/31/2016Employer/HealthPlan Reporting to

IRS

1/31/2016W-2 (250+)

1/1/2016Large Employer

Mandate (Transition Relief)


110636

Preparing for 2015:

Assess Your Readiness for ACA Requirements

1. Compute if Your Group is an “Applicable Large Employer” (50+ FTEs)1

a. State of ND is Large Employerb. Political Sub-Divisions must compute FTE count

2. Determine if you offer Coverage to Substantially All “Full-Time”2 Employeesa. Employers with <50 FTEs are not subject to the employer mandateb. Employers with 50-99 Report/Certify Only in 2015 and Offer coverage to 95% in 2016 c. Employers with 100+ Offer Coverage to 70% in 2015 and 95% in 2016 d. Applicable Large Employers review and determine full-time status of all employees

> ACA Full-Time Definition = Average 30+ hrs/week (130 hrs/month)> (State of ND Full-Time = Current State Full-Time + Temporary Full-Time)

3. Evaluate if coverage offer is affordable3 (Note: NDPERS coverage already meets minimum value and minimum essential coverage requirements)

4. Update Eligibility, Premium Contribution and Full-Time Employee Criteria a. Implement Salary and Premium Contribution combination that is affordable

16

Summary of Important Steps to Complete in 2014


1) See Link in Resources to Shared Responsibility Regulations (Pages 8546, 8582-83 )and IRS Q & A (Q 4-14)2) “ “…Regulations (Pages 8552-63, 8584-8597)and IRS Q & A (Q 15-17)3) “”… Regulations (Pages 8563-65, 8599-8601)and IRS Q & A (Q 19)

110636

1. Is Your Group an “Applicable Large Employer?

17

Employers need to determine if they are an Applicable Large Employer (50+ FTEs) and subject to the employer mandate in 2015 (100+FTEs) or 2016 (50-99 FTEs).

Regulation applies standards for common law employees, hours of service and employer aggregation and is based on previous calendar year. For 2015 determination, employers may use any consecutive six month period in 2014 to determine large group status. (p. 8573)

Calculate for each month the sum of the number of full-time employees(including seasonal) + non full-time employees(including seasonal) calculated as full time equivalents(FTE). FTEs are calculated as the aggregate monthly hours of non full-time employees divided by 120. Seasonal worker exception may apply.


2014

Employee Status Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Average

Full-Time Employees 45 45 45 45 45 45 45 45 45 44 45 45 44.9

+Part-Time FTEs (<120 Hrs/Month) 3.8 3.8 3.8 3.8 3.8 3.8 3.9 4.0 3.8 3.8 3.8 3.8 3.8

+Seasonal FT & FTEs - - - - 10.0 10.0 10.0 - - - - - 2.5

Total FTEs With Seasonals 48.8 48.8 48.8 48.8 58.8 58.8 58.9 49.0 48.8 47.8 48.8 48.8 51

FTE Without Seasonals 49 49 49 49 49 49 49 49 49 48 49 49 49

Seasonals Cause FTEs to be 50+? No No No No Yes Yes Yes No No No No No

Average FTEs 51

FTEs Avg 50+ <120 days & was excess due to Seasonals? Yes If Yes, Seasonal FTEs are excluded and employer is Small Group

110636

2. Do you offer Coverage to Substantially All Full-Time Employees?

18

Employers with 50-99 FTEs Report in 2015 and Offer Coverage to 95% of full-time employees in 2016 (p. 8574)• Employers may avoid penalties for 2015 Plan Year if they certify that they meet eligibility

conditions:• Limited Workforce Size – Determination of size (50-99 FTEs) in accordance with FTE

count for “applicable large employer” status.• Maintenance of workforce and aggregate hours of service – Reduction for bona fide

business reasons does not affect eligibility for transition relief.• Maintenance of previously offered health coverage - contribution , coverage and

classes.• Provide certification of eligibility. (Part of 6056 reporting)


110636


19

Employers with 100+ FTEs will offer coverage to 70% of full-time employees in 2015 and 95% in 2016

• Review coverage eligibility criteria and employee status according to ACA specifications.

• Full-Time Employee: Position is defined as full-time with the expectation that employee will work an average of 30 or more hours per week.

• Variable Hour Employee: Employer cannot determine if position is “reasonably expected” to average 30 or more hours per week and can utilize a safe harbor look-back measurement period to determine if employee is full-time.

• Seasonal Employee: Position occurs during the same season each year and is less than 6 months in duration (Final Regulations). Positions determined to be seasonal can be subject to a look-back measurement period if applicable.

• Part-Time Employee: Position is defined as not full-time with the expectation that employee will always work less than 30 hours per week and is not a variable hour or seasonal employee.

• Identify Variable Hour and Seasonal Employees and evaluate full-time status using:• Monthly Measurement. OR• Optional Look-Back Measurement Safe Harbor.


110636

2. Do you offer Coverage to Substantially (95%) All Full-Time Employees?

a. Safe Harbor Periods(If applicable) - Employers may utilize optional safe-harbor time period to determine full-time status of both on-going and new employees.

– Standard Measurement Period - Time period of between 3 & 12 consecutive months where employer tracks on-going employees’ hours of service and determines if employees works an average of 30 hours per week and are considered full-time. Employer also uses “Initial Measurement Period” for new employees. > For 2015 Stability Periods, employers may adopt a shorter measurement period of not less than six

consecutive months, that begins no later than July 1, 2014 and ends not earlier than 90 days prior to first day of 2015 plan year.

– Administrative Period: Optional time period between Measurement and Stability periods to calculate full-time status, communicate status to employee and conduct open enrollment. Standard Administrative period cannot exceed 90 days. The combined length of Initial Measurement Period + Administrative period for New Employees, determined to be full-time, cannot exceed the first of the month following new employee’s one-year anniversary from hire date.

– Stability Period: Time period of not less than 6 months that employees determined to be full-time during the Standard measurement period are offered full-time coverage. Corresponds to the plan year.

b. Employers may use unique look-back measurement periods for the following categories of employees but must apply criteria uniformly to all employees within category:• Salaried or Hourly.• Employees whose primary places of employment are in different states.• Collectively bargained and non-collectively bargained employees.• Employees covered by separate collective bargaining agreements. 20

Legal and Tax Advice and Compliance Disclosure: The information provided in this document is not intended to advise any company on how it may comply with any provisions of the referenced law or regulations, nor it is otherwise intended to impart any legal or tax advice. If you have any questions about how to comply with this or any other law or regulation, we recommend that you consult with appropriate legal and tax experts.

110636


• Common Law Employee Standard applies where worker is considered an employee if the employer determines the type of work completed and also how it is completed.

• Rehire Rules - Employees are considered on-going if they have completed a full standard measurement period. Rehired employees can be considered new if they have no hours of services for 13 weeks (26 weeks for Educational Institutions) or if rehired employee’s break in service is between 4-13 weeks (4-26 weeks for Educational), you may treat as new employee if break exceeds the length of prior service. Employer may restart measurement periods for new employees.

• Hours of Service - Based on hours for which employee is paid or, is entitled to be paid for time when no duties are performed. The hours of service definitions are used both in determining applicable large employer group status and full-time employee status in relation to employer shared responsibility requirements. Regulation contains various exclusions and calculations that affect certain students, volunteers, adjunct faculty, on-call staff and others.

• Employers track hourly employees based on actual hours and may apply equivalency methods for non-hourly employees based on days (8 hrs) or weeks (40 hours).

• Educational institution employees hours of service are based on hours worked during expected operating months. (school year)

21Legal and Tax Advice and Compliance Disclosure: The information provided in this document is not intended to advise any company on how it may comply with any provisions of the referenced law or regulations, nor it is otherwise intended to impart any legal or tax advice. If you have any questions about how to comply with this or any other law or regulation, we recommend that you consult with appropriate legal and tax experts.

110636



• If monthly measurement is applied, full-time employees are offered coverage as defined by eligibility criteria.

• If measurement periods are applied, each on-going employee’s hours are reviewed during the standard measurement period to determine if full-time and eligible for coverage during stability period.

• On-going employees are defined as having been employed through one complete standard measurement period.

• Employers may use a shorter measurement period in 2014.

2013 2014 2015 2016Employee Status Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

On-Going Employees

- Full-Time*

-Variable Hour/Seasonal*

Standard Measurement Period

Administrative Period Admn 1 Admn 2

Stability Period

* Calculate hours per week for each employee during measurement period, those with 30+ are considered full-time and must be offered coverage(Educational Institution consideration of days not in session).

Standard Measurement Prd. 1 Standard Measurement Period 2 Stand Measurement 3 ->

Stabi l i ty 2 ->Stability Period 1

110636


23

• New Variable Hour and Seasonal Employees’ hours are reviewed during initial 12 month measurement period to determine full-time status. If determined to be full-time, employee is offered coverage during initial stability period following administrative period.

• New Full-Time (State Temporary) employees upon hire must be offered coverage first of month following hire date. At beginning of following year’s measurement period they become on-going employees and subject to standard measurement period.


2013 2014 2015 2016Employee Status Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

On-Going Employees

- Full-Time*

-Variable Hour/Seasonal*

Standard Measurement Period

Administrative Period Admn 1 Admn 2

Stability Period

* Calculate hours per week for each employee during measurement period, those with 30+ are considered full-time and must be offered coverage(Educational Institution consideration of days not in session).

New Var. Hr/Seasonal Employees

Employee D

- Initial measurement (30+ hrs/wk?)

- Administrative (Optional) Adm

- Initial Stability (if 30+ hours)

Employee E




Employee F




* Educational Institutions must exclude or account for days when school is not in session.

*After completing a full Standard Measurement Period, employees are considered on-going employees and subject to current Standard Measurement Period

Initial Stability Period->

Standard Measurement Prd. 1 Standard Measurement Period 2 Stand Measurement 3 ->

Stabi l i ty 2 ->

Initial Measurement Period

Stability Period 1

Initial Stability Period



Initial Stability Period->

110636

Examples:

• Variable Hour Employee – Employee hired to long-term position but employer cannot reasonably determine if employee will work an average of 30 or more hours/week (130+ hours/month). Employer can track hours and determine full-time status using look-back measurement period. At end of measurement and administrative period, if employee is determined to be full-time they are offer coverage for the future stability period.

• Seasonal Employee – Employee hired to position on or around May 1 each year to work on grounds or facility for a period of less than six months. Seasonal employees can be considered variable hour and subject to the look-back measurement period to determine their full-time status. If position is typically more than 6 months in duration, it is likely not a seasonal position and employee reasonably expected to work full-time would need to be offered coverage immediately according to full-time criteria and employer would track hours for future look-back determination.

• Short-Term Employee – Employee hired to work a limited term project for 8-12 months and is reasonably expected (based on past projects) to work more than 30 hours/week (130 hours/month) during project. Employee is not a seasonal employee(>6 months) and would be offered coverage according to full-time criteria and employer would track hours from hire date.

24Legal and Tax Advice and Compliance Disclosure: The information provided in this document is not intended to advise any company on how it may comply with any provisions of the referenced law or regulations, nor is it otherwise intended to impart any legal or tax advice. If you have any questions about how to comply with this or any other law or regulation, we recommend that you consult with appropriate legal and tax experts.

110636


25

2015 Large Employer Mandate: 100+ FTEs (Example Group)

Status (Current) Full-Time(30+ Hrs/Wk)

Part-Time (<30 Hrs/Wk) Total

Eligible Employees

- Participating 174 28 202

- Non-Participating 37 85 122

Total Eligible 211 113 324

Non-Eligible 80 10 90

Total Employees 291 123 414

-Total Eligible /Total Employees* 72.5%

* Must be 70%+ in 2015 (95%+ in 2016) Assuming Group Meets Transition Requirements

Coverage Profile of Employees: 100+ Must offer Coverage to 70%+ of full-time employees in 2015 (and 95% in 2016).


110636

3. Is Coverage Affordable?

• Affordability in 2015 - Applicable Large Employers need to determine if coverage is affordable for their employees starting in 2015. Large groups may utilize one of three options under a safe-harbor formula to determine if premium is considered affordable for each employee based on single contribution and premium costs compared to threshold of 9½% of their employee-only income.

a. Form W-2 Wages –Income of employee is based on wages paid by employer as reported in Box 1 on W-2 which includes reductions for section 401(k) and section 125 . Calculation allows for partial years due to beginning or ending of employment. Coverage is considered affordable if employee’s required contribution for the lowest cost self-only plan does not exceed 9 ½% of W-2 Box 1 wages for coverage period.

b. Rate of Pay – Offer of coverage is considered affordable for a particular calendar month if employee’s required contribution for the lowest cost self-only plan does not exceed 9 ½% of monthly income as calculated: a. 130 hrs x hourly rate for month or b. monthly salary.

c. Federal Poverty Line – Offer of coverage is considered affordable for a particular calendar month if employee’s required contribution for the lowest cost self-only plan does not exceed 9 ½% of annual Federal Poverty Line for a single individual divided by 12. 2014 FPL is $11,670.


110636

3. Is Coverage Affordable?

27

Employer can adjust contribution, wages, hours or a combination to achieve affordability.


Affordability Analysis

Full-Time Employee Affordability Example

Employer Inputs 1. Form W-2 2. Rate of Pay 3. FPL

Hours/Week 30 30 30

Monthly Salary (adjusted for Deferred Comp/Section 125) 2,000$

Wage/Hour* 15.50$

Federal Poverty Line(Annual) 11,670$

Employer Single Contribution 56.00% 56.00% 79.00%

Employee Single Contribution 44.00% 44.00% 21.00%

Monthly Single Premium 422.98$ 422.98$ 422.98$

Annual

Income 24,000$ 24,180$ 11,670$

Hours/Month 130.0 130.0 130.0

Premium

Employer 2,842.43$ 2,842.43$ 4,009.85$

Employee 2,233.33$ 2,233.33$ 1,065.91$

Total 5,075.76$ 5,075.76$ 5,075.76$

Employee Single Premium % of Income 9.3% 9.2% 9.1%

Affordability Safe Harbors (*Full-Time Employee Contribution to Single Premium < 9.5% of Income)

* This worksheet is for Il lustration Purposes and should not be considered legal or tax advice - Refer to ACA Regulations and specific instructions for calculating the three Affordabil ity Safe Harbors.

Affordability: Based on Current

110636

Additional Requirements:

a. Marketplace Notice : This notification is required to be delivered to employees within 14 days of their hire date. This notice informs employees of the Health Insurance Marketplace (Exchange), whether their employer plan meets minimum coverage standard and how to access additional information. More information is available on Department of Labor website. http://www.dol.gov/ebsa/healthreform/regulations/coverageoptionsnotice.html

b. Discrimination: Penalties for discrimination in favor of highly compensated employees are significant. Enforcement dates have not been set but employer should review current benefits and contribution to ensure they are compliant. This affects all non-grandfathered groups (including <50 FTEs). Determine if change in eligibility or contribution amount or grandfathered status is required and calculate additional cost if applicable.

.


http://www.dol.gov/ebsa/healthreform/regulations/coverageoptionsnotice.html

110636

Additional Requirements

Taxes and Fees: Three of the major taxes and fees related to ACA are described below. BCBSND pays all three taxes for fully-insured groups including NDPERS:

i. The Patient-Centered Outcomes Research Institute (PCORI) Fee affects fully insured and self-funded plans. Effective 2012-2019, health insurance issuers and employers sponsoring self-funded group health plans must pay $1 per member per year for plan years ending October, 2012- September, 2013. The fee increases to $2 per member per year in the second year. Then, the fee adjusts based on the percentage increase in the projected per capita amount of national health expenditures. Payment is due July 31 of each year.

ii. The Transitional Reinsurance Fee impacts both fully insured and self-funded plans. The fees are distributed to health insurance issuers in the non-grandfathered individual market that disproportionately attract individuals at risk for high medical costs. The fee is temporary and is collected from 2014-2016 and the initial year’s fee is $63/member/year or $5.25/member/month. Payment is due in two installments in 2015. First is due in January ($52.50) and second ($10.50) is due in 4th quarter of 2015.

iii. Health Insurance Fee is assessed against all fully-insured business and is projected to cost BCBSND an estimated $14M in 2014 and add approximately 1.4% to premiums. For 2015, BCBSND estimates this tax will add 2.6% to premium.


110636

Questions

Resources•BCBSND.com Learn more about health reform

•ItStartsWithBlueND.com BCBSND’s website for individuals to learn more about what health reform means to them

•U.S. Department of Labor – http://www.dol.gov/ebsa/healthreform/index.htmlU.S. Department of Labor’s dedicated health reform web page

•N.D. Department of Insurance – http://www.nd.gov/ndins/healthcarereform/ N.D. Department of Insurance’s dedicated health reform web page

•Healthcare.govFederal government website where individuals and small businesses can shop for and purchase health insurance

• US Treasury Employer Mandate Press Release and Links – http://www.treasury.gov/press-center/press-releases/Pages/jl2290.aspx

• Employer Shared Responsibility rules defined in Federal Register, Vol. 79, No. 29 Published Wednesday, February 12, 2014 at http://www.gpo.gov/fdsys/pkg/FR-2014-02-12/pdf/2014-03082.pdf

• IRS Shared Responsibilities FAQ - http://www.irs.gov/uac/Newsroom/Questions-and-Answers-on-Employer-Shared-Responsibility-Provisions-Under-the-Affordable-Care-Act


http://www.treasury.gov/press-center/press-releases/Pages/jl2290.aspx

http://www.gpo.gov/fdsys/pkg/FR-2014-02-12/pdf/2014-03082.pdf

http://www.irs.gov/uac/Newsroom/Questions-and-Answers-on-Employer-Shared-Responsibility-Provisions-Under-the-Affordable-Care-Act

http://www.irs.gov/uac/Newsroom/Questions-and-Answers-on-Employer-Shared-Responsibility-Provisions-Under-the-Affordable-Care-Act

IMPLEMENTATION

NDPERS Website

Marketplace Notice

Notice of Coverage Options must be provided to ALL new employees within 14 days of hire

Sample posted on website

Dual Coverage Policy

Guidance received from ConsultantContinue to apply existing policy for two

married state employeesWill need to obtain a “Decline Offer of Health

Insurance Coverage” from the spouse that is not the policy holder

Needs to be obtained annually during each Administrative Period

Rates – Single + Dependent

Rates are finalized through June 30, 2015 Existing rate levels will remain

SingleFamily

Option of Single + Dependent not available at this time but will be considered in future

Offer of Coverage Special Enrollment Window

November 24 – December 5 MSS will not allow temporary employees to enroll in

health plan as of 11/15/14 Health Insurance Application or Change SFN 60036

New section added to address ACA eligible temps Will require Employer to certify that the employee is

eligible Employer will need to inform us of Measurement

Period to determine Qualifying Event to join

Decline Offer of Coverage

Decline FormNew Form will be available – SFN

60711Should be obtained during each

Administrative Period after offer is madeMarried State Employee not carrying

Policy should complete

FORM # 60711

DECLINE OFFER OF HEALTH INSURANCE COVERAGE NORTH DAKOTA PUBLIC EMPLOYEES RETIREMENT SYSTEM SFN 60711 (Rev. 08-2014)

NDPERS PO Box 1657 Bismarck, North Dakota 58502-1657

(701) 328- 3900 1-800-803-7377 Fax 701-328-3920

PART A EMPLOYEE IDENTIFICATION

Name (Last, First, Middle)

NDPERS Member ID

Last Four Digits of Social Security Number

Date of Birth

Organization Name NDPERS Organization ID

PART B OFFER OF HEALTH INSURANCE COVERAGE

I understand that I am offered adequate and affordable coverage as a “full-time” employee as defined by the Affordable Care Act. I understand that the coverage is offered to me and my Eligible Dependents. Please check the applicable box:

I am already covered under the NDPERS health insurance through my spouse. I understand that my coverage will remain through my spouse unless my spouse terminates employment or ceases to be an Eligible Employee, at which time I will have the opportunity to apply for coverage within 31 days of the event as an Eligible Employee.

I decline for one of the following (check applicable) reasons:

I have coverage through my spouse’s employer (non-NDPERS) I have Medicare coverage I have other individual coverage (non-NDPERS) Other:______________________

PARTC EMPLOYEE AUTHORIZATION

I hereby decline health insurance coverage at this time. I understand that in declining this offer of health insurance coverage, I may not be eligible to apply for a federal tax subsidy through the Marketplace Exchanges. I fully understand that if I or my Eligible Dependents desire to be covered under my employer's insurance Benefit Plan in the future, I and my Eligible Dependents may have a Waiting Period for Preexisting Conditions and one of the following must apply: 1. If at the time I am declining coverage, it is because:

a. I or my Eligible Dependents have other group insurance coverage, and that coverage is either terminated as a result of loss of eligibility (Including loss as a result of legal separation, divorce, death, termination of employment or reduction of hours) or employer contributions toward such coverage was terminated; or

b. Coverage was under COBRA at the time I declined coverage and that coverage has been exhausted.

Under (a.) and (b.) above, I must complete a membership application within 31 days after I lose my current coverage. 2. If I have a new dependent as a result of marriage, birth, adoption or placement for adoption, I may enroll myself and my

Eligible Dependents, provided that I request enrollment within 31 days of marriage, birth, adoption or placement for adoption.

3. If I do not meet requirements under 1 or 2 above, I may apply as a Late Enrollee, Late Enrollees must request

enrollment during the Enrollment Period.

________________________________________ ____________________

Employee's Signature Date

Temporary Employee Payroll File

Questions?

Questions & Answers

List based on questions asked through Pilot Employer Group July 10 ACA Special Forum HR/Payroll calls to NDPERS

List is broken into category of question List will be updated as new questions arise or

more guidance is provided.

DEFINITIONSQ: What do the ACA terms Standard Measurement Period, Administrative Period and Stability Period refer to?

–Standard Measurement Period - Time period of between 3 & 12 consecutive months where employer tracks on-going employees’ hours of service and determines if employees works an average of 30 hours per week and are considered full-time. (Employer also uses “Initial Measurement Period” for new employees)

–Administrative Period: Optional time period between Measurement and Stability periods to calculate full-time status, communicate status to employee and conduct open enrollment. (The combined length of Initial Measurement Period + Administrative period for New Employees, determined to be full-time, cannot exceed the first of the month following new employee’s one-year anniversary from hire date.)

–Stability Period: Time period of not less than 6 months that employees determined to be full-time during the Standard measurement period are offered full-time coverage. Stability period can correspond to the plan year or to another time period as defined by employer.

ELIGIBILITY

Q: If you have an employee and you determine that they meet the federal full-time employee (FTE) definition, do you offer them coverage and then tell them what their premium contribution will be?

A: Yes, once you determine an employee meets the ACA definition of FTE, you will need to offer them coverage effective the first of the month following date of hire. You should also visit with them regarding the affordability of coverage and what their premium requirement would be if they elect coverage.

Q: If a person has 3 types of jobs that they are performing with the same employer, do you evaluate each job separately for determining eligibility?

A: ACA would have you sum the hours within the same employer to determine if the individual meets ACA FTE definition and should be offered coverage.

Q: How should employees hired through a temporary staffing service be handled?

A: A person employed through a temporary staffing service is an employee of the staffing service as long as the staffing service fulfills the common-law definition of the employer, including controlling the details of how services are performed, providing compensation and benefits, and acting as the employer for payroll tax purposes. For information on the distinction between an employee and an independent contractor, see http://www.nd.gov/labor/contractor/index.html

http://www.nd.gov/labor/contractor/index.html

Q: If you have an employee out on FMLA and you hire a temporary employee, do you need to offer the temporary employee coverage?

A: If the employee is reasonably expected to work at least 30 hours per week/130 hours in a month, then you would want to offer them coverage effective 1st of month following hire. If you cannot determine this, then you would need to do an initial measurement period and determine at the end of this period. If eligible, you would offer coverage during the stability period. If not, no coverage offer is needed.

Q: If you have a variable hour employee who after the initial measurement period is determined to be eligible during the stability period, but they are then not eligible during the next measurement period, you no longer offer them coverage during the next stability period, right?

A: Yes, that is correct.

Q: If an employee is seasonal (below 6 months), is it necessary to perform a look back?

A: As long as employment hours are below 6 months and position is a recurring seasonal position, you can start the measurement period over each year when they return.

Q: How do you handle a temporary employee who exceeds 1560 hours in a five month period?

A: Unless the position is seasonal, the look-back period would determine eligibility and since exceeded, the employee would meet the requirements and should be offered coverage. Seasonal positions are those that are for less than 6 months on a recurring basis.

Q: If someone qualifies and is in the stability period and then terminates, do we have to continue to pay for duration of stability period?

A: No, once person terminates, the obligation of the employer to pay ends the month following the month of termination.

Q: How do you handle an employee that is a full-time permanent employee with benefits during most of the current look back period prior to 1/1/15 but then moves into a variable hour temporary position?

A: See page 8595 & 8596 of the Federal Register. The example indicates that because the individual is moving from a monthly measurement as a permanent employee to the look-back determination as a variable hour employee, if they meet the required hours, including the hours as a permanent employee, then they will be entitled to the insurance for the full stability period. If they remain a variable hour employee, then they will roll into the next year’s look back period and will be eligible only if they meet the necessary hours ongoing.

Q: How do you handle an employee that does not meet the ACA FT definition during measurement period but then increases hours and is now working in a position that is reasonably expected to meet requirements. Do you offer coverage immediately (first of month following change) or wait until the end of the current look-back measurement period & evaluate based on all hours in measurement period.

A: General guidance appears to indicate that once a person changes their hours where it is reasonably expected that they will meet the ACA FT definition, they should be offered coverage rather than waiting to the end of the look-back measurement period.

Q: Can you provide direction as to whether a summer intern (law student intern) would be a seasonal employee under the ACA?

Every summer, several of our offices hire a law student intern to work. They usually work 40 hours per week, but only for the summer break.

So if there is no change of that, they are considered “seasonal”. Any issue with the person who comes back the following summer? Or who works one summer, and then following graduation applies for a job with us?

A: If there is a chance a summer intern could be retained for additional hours beyond the summer, it would not be allowed to classify them as a “seasonal worker”.

For interns that return the following summer, as long as there is a break of more than 13 weeks in employment, which I believe in this case there would be, they would be considered a new hire when they return whether it is to intern or for more permanent employment following graduation. They would at that time be evaluated for whether they are working full time (more than 130 hours/month) and offered insurance, or if they are deemed seasonal, then it would not be required to offer them insurance.

Q: If after a year the employee is no longer eligible for the health insurance, will COBRA coverage be available?

A: Yes, COBRA is available any time a covered individual loses eligibility to the insurance plan.

Q: Will this be the same policy (coverage) we currently have with NDPERS for benefitted employees?

A: Yes, it will be the same plan (PPO/Basic).

Q: Should the employer offer coverage to an eligible employee if the employee is or can be covered by a spouse’s or parent’s plan?

A: Yes, according to the ACA, an employee who meets eligibility must be offered coverage regardless of being covered by a spouse’s or parent’s plan.

AFFORDABILITY/SAFE HARBOR/PREMIUM

Q: When determining the affordability piece, you apply the 9.5% based upon single coverage. However, must we offer the non-spouse dependents coverage as well?

A: Yes, that is correct.

Q: If the employee decides the family rate is too expensive, can they send the wife and children to the marketplace for their coverage?

A: No, not if employer coverage was offered and it is deemed affordable.

Q: If we use the W-2 safe harbor, do we just use income and the single premium amount?

A: Yes, you may need to request W-2 from previous year if dealing with a new hire, to determine affordability.

Q: When determining premiums, for state agencies, are the temporary/LOA premiums the applicable premium? For political subs, there are not special premiums, so is it based on single/family coverage?

A: Correct.

Q: Will NDPERS be offering Individual + Dependent Coverage?

A: The rates are set through June 30, 2015 and do not include an Individual + Dependent Coverage so this will not be offered at this time.

Q: Grandfathered status – If the full premium for a temporary employee was paid as of 3/2010 and then the employer changes and charges the employee 9.5% of wages, won’t this cause a potential loss in GF status?

A: An employer should not decrease the amount they are paying towards insurance by more than 5% as this could impact the plan’s Grandfathered Status.

Q: If an employee works sporadically, how do they pay their portion of the premium when there isn’t a paycheck?

A: NDPERS will bill the employer for the full premium. The agency will then need to collect the required premium from the employee, whether through payroll deduction or personal check.

STATE AGENCY RELATED

Q: Who will decide if the State is the employer or individual agencies are the employer for the definition of “Large Employer”?

A: The State of North Dakota will be the employer for all state organizations. For reporting purposes, there will be two Large Employer Members within the state which are 1) state agencies & 2) higher education.

Q: For state agencies, if an agency hires a temporary employee who previously worked for another state agency, how is this administered for determining eligibility?

A: The state is the employer and therefore, the total hours worked within the measurement period for the state would need to be considered for determining eligibility.

Q: How will married state employees be handled? Will NDPERS still only allow one contract?

A: Decline Offer of Coverage form should be completed by the spouse that is not the contract holder. The form should be completed each year.

Q: Does the ACA allow us not to track permanent state eligible employees who are fully benefited?

A: They are to be tracked under ACA guidance, however, since they are being offered coverage, concerns of penalty do not apply.

POLITICAL SUB RELATED

Q: How should county boards be handled? Will they count towards the full time employee number?

A: Under ACA, they would not meet the FTE definition if they are not working on average 30 hours per week/130 hours per month. However, under NDCC 54-52.1, they would continue to be offered coverage as they are now. If they don’t meet the FTE definition, then they will not count towards the number of FTE needing to be offered coverage.

Q: For political subdivisions, what can they expect for premium increase next biennium?

A: Current projection is a 21% increase.

Q: If a political subdivision is a small employer, is their only requirement to have provided access to the marketplace to all employees by October 1, 2013 and new hires thereafter.

A: At this time, yes, that is only requirement we are aware of.

Q: For a small employer who loses GF status, do they have to come off NDPERS?

A: Yes, by losing GF status as a small employer, ACA requires that the employer to have a metallic plan. Therefore, the small employer must come off NDPERS as our plan does not meet ACA requirements for metallic plan.

NOTICES/TAX REPORTING

Q: Will there be a standard waiver form available?

A: Yes, there will be a standard decline form available from NDPERS or an employer can choose to have their own form.

Q: Report 6056 – Do you have recommendations for what information will be needed for support in record-keeping/reporting?

A: IRS regulations were released in August 2014.

Q: How soon after hiring should the marketplace notice be provided? Does the notice need to be provided to terminating employees?

A: Within 14 days of hire, the notice should be provided. The notice does not need to be provided to terminating employees. NDPERS will provide them with a COBRA notice.

Send questions that you have to Rebecca Fricke at [email protected]

mailto:[email protected]

ACA New Hire Eligibility Process

Decision Chart

• Decision Chart created and available on website

• Case Examples:• Permanent under NDCC definition• Temporary

• Reasonably Expected• Seasonal• Variable Hour

New Employee – Affordable Care Act Decision Chart Revised 8/29/14

Is employee ever expected to exceed 30 hours/week or 130 hours/month?

Begin initial measurement period for 12 months from date of hire. At end of first 12 month period, review hours to determine if the employee worked at least 1560 hours during initial measurement period. If yes, offer coverage effective 1st of next month following determination (must be within 13 months of employment) and provide coverage for the following 12 months (stability period). The employee will then cycle into the ongoing measurement and stability periods that apply to other temporary employees to determine eligibility for future years.

If the employee is seasonal, each year of seasonal employment will begin a new measurement period.

Is the employee filling a permanent FTE as defined under NDCC 54-52.1 (working at least 20 hours/week for 20 weeks/year in a position that is regularly funded and not limited in duration)?

Yes

No

Offer insurance and pay 100% of premium if state. Political subs will be based upon payment policy. Coverage must be affordable per ACA for those

meeting ACA definition.

Is the employee temporary and reasonably expected to work at least 30 hours/week or 130 hours/month?

Yes

No

Yes

Offer insurance effective 1st of month following hire and provide affordable coverage if applied for. Monitor the employee’s hours monthly to ensure “reasonably expected” to meet and should continue coverage.

No No

Employee is not eligible for coverage in accordance with temporary employee eligibility criteria.

Yes

Is employee position seasonal (regularly recurring on an annual basis and less than 6 months in duration)?

Is position “reasonably expected” to meet full-

time hours based on past history, how the position was posted, job description, etc.?

No

No

Yes

Offer insurance effective 1st of month following hire and provide affordable coverage if applied for. Monitor the employee‘s hours monthly to ensure “reasonably expected” to meet and should continue coverage.

Is employee considered variable hour because you cannot determine if they are “reasonably expected” to work an average of 30 hours/week or 130 hours/month?

Yes

Was employee hired through a temporary employment agency or contracted?

No

Yes Determine if common law

employee based on facts and circumstances.

Step 1

Was the employee hired through a temporary employment agency or contractor?






Yes

No




Yes

No

Yes


No No


Yes




No

No

Yes



Yes


No



If Yes

Determine if common law employee based upon facts and circumstance.






Yes

No




Yes

No

Yes


No No


Yes




No

No

Yes



Yes


No



If No, go to step 2

Is the employee filling a permanent FTE as defined under ND-52.1?






Yes

No




Yes

No

Yes


No No


Yes




No

No

Yes



Yes


No



If Yes

Offer insurance and pay 100% of premium if state. Political subs will pay based upon payment policy and must be affordable per ACA for those meeting ACA definition.






Yes

No




Yes

No

Yes


No No


Yes




No

No

Yes



Yes


No



If No, go to Step 3







Yes

No




Yes

No

Yes


No No


Yes




No

No

Yes



Yes


No



If Yes

Offer insurance effective 1st of month following hire and provide affordable coverage if applied for. Monitor hours to ensure “reasonably expected” to meet and should continue coverage.






Yes

No




Yes

No

Yes


No No


Yes




No

No

Yes



Yes


No



If No, go to Step 4







Yes

No




Yes

No

Yes


No No


Yes




No

No

Yes



Yes


No



If No







Yes

No




Yes

No

Yes


No No


Yes




No

No

Yes



Yes


No



If Yes, go to Step 5







Yes

No




Yes

No

Yes


No No


Yes




No

No

Yes



Yes


No



If Yes

Begin initial measurement period. At end of measurement period, review hours to determine if the employee worked at least 1560 hours. If yes, offer coverage effective 1st of the next month following determination and provide coverage for stability period.






Yes

No




Yes

No

Yes


No No


Yes




No

No

Yes



Yes


No



If No, go to Step 6

Is position “reasonably expected” to meet full-time hours based on past history, position posting, job description, etc?






Yes

No




Yes

No

Yes


No No


Yes




No

No

Yes



Yes


No



If Yes

Offer insurance effective 1st of month following hire and provide affordable coverage if applied for. Monitor hours to ensure “reasonably expected” to meet and should continue coverage.






Yes

No




Yes

No

Yes


No No


Yes




No

No

Yes



Yes


No



If No, go to Step 7







Yes

No




Yes

No

Yes


No No


Yes




No

No

Yes



Yes


No



Yes

Begin initial measurement period. At end of measurement period, review hours to determine if the employee worked at least 1560 hours. If yes, offer coverage effective 1st of the next month following determination and provide coverage for stability period.






Yes

No




Yes

No

Yes


No No


Yes




No

No

Yes



Yes


No



Example 1: You hire an employee for 35 hours per week in a position that is considered permanent, regularly funded and is not limited in duration.– Meets NDCC 54-52.1 definition of Eligible

Employee– Meets ACA Definition of Full-Time Employee