Securities and Investment Advisory Services Offered through Allegheny Investments, LTD, a registered broker/dealer. Member FINRA/SIPCStone Quarry Crossing 811 Camp Horne Road Suite 100 Pittsburgh, PA 15237

Phone: 800-899-3880

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The intent of this communication is strictly to provide general information on some key issues related to Healthcare Reform. None of this material should be construed as the definitive answer on how these rules apply to your organization. Additional facts and information or future developments may affect the information provided. Legal Counsel should be contacted on how to implement these rules within your operations.

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1. Ambulatory Patient Services2. Emergency Services3. Hospitalization4. Maternity and New Born Care5. Mental Health and Substance Abuse6. Prescription Drugs7. Rehabilitative and Habilitative Services8. Laboratory Services9. Preventive and Wellness Services and Chronic Disease

Management10. Pediatric Services, including Oral & Vision

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• Employed an average of at least 50 Full-Time (FT) and Full-Time Equivalent (FTE) Employees on business days during the preceding calendar year

• Must count FT and Full-Time Equivalents (FTE)• Employer not an ALE if the Employer’s workforce– Exceeds 50 FT& FTE Employees for 120 days or fewer– Employees in excess of 50 during a 120-day period are

Seasonal Employees• Seasonal Employees perform work on seasonal basis– Retail Worker during Holiday Season– Ski Instructor– Agricultural Worker

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1. Add up the hours - up to 120 hours - for each FTE Employee for the month

2. Divide the total of the monthly hours above by 120. Fractions are rounded to the nearest hundredth. The result is the number of FTE’s Employees for the month

3. Add the above monthly total of FTE’s to the number of FT Employees for the month to reach the monthly total of all Employees 12

1. Add each monthly total of all FT & FTE’s Employees to reach the yearly total of all Employees

2. Divide this total by 12. Round down the fractions to determine the monthly average number of Employees for the year.

3. Employer will be an ALE if he has 50 or more Full Time Employees, including FTE’s, for the preceding year 13

Mo. Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Tot

FT 43 43 43 43 43 43 43 43 43 43 43 43 516

FTE 800/120

6.67 6.67 6.67 6.67 6.67 6.67 6.67 6.67 6.67 6.67 6.67 6.67 80.04

Mo. Total

49.67 49.67 49.67 49.67 49.67 49.67 49.67 49.67 49.67 49.67 49.67 49.67 596.04

Sum of all months: 596.04 divided by 12 = 49.67 Average Number of EmployeesRule on fractions: At the end of the year, round down to 49 Total FT & FTE’s Empl.Employer IS NOT an Applicable Large Employer (ALE)

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Mo. Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Tot

FT 45 45 45 45 45 45 45 45 45 45 45 45 540

FTE 800/120

6.67 6.67 6.67 6.67 6.67 6.67 6.67 6.67 6.67 6.67 6.67 6.67 80.04

Mo. Total

51.67 51.67 51.67 51.67 51.67 51.67 51.67 51.67 51.67 51.67 51.67 51.67 620.04

Sum of all months: 620.04 divided by 12 = 51.67 Average Number of EmployeesRule on fractions: At the end of the year, round down to 51 Total FT & FTE’s Empl.Employer IS an Applicable Large Employer (ALE)

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Mo. Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Tot

FT 43 43 43 43 43 43 43 43 43 43 43 43 516

FTE 800/120

6.67 6.67 6.67 6.67 6.67 6.67 6.67 6.67 8.331000/120*

8.33 8.33 8.33 86.68

Mo. Total

49.67 49.67 49.67 49.67 49.67 49.67 49.67 49.67 51.33 51.33 51.33 51.33 602.68

Sum of all months: 602.68 divided by 12 = 50.22 Average Number of EmployeesRule on fractions: At the end of the year, round down to 50 Total FT & FTE’s Empl.Employer MAY BE an Applicable Large Employer (ALE), depending on classification of Seasonal/Not Seasonal Employees* For this purpose only, 4 calendar months will be treated as the equivalent of 120 days as per IRS Notice 2011-36

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• SINGLE, COMBINED FORM FOR INFORMATION REPORTING 1. Top half includes the information needed for section 6056,

while the bottom half includes the information needed for section 6055

2. Employers with fewer than 50 Full-Time Employees are exempt

3. Employers that are large enough and are “self-insured” will complete both parts of the combined form for information reporting

4. Employers that are over 50 Employees, but do not “self-insure” will complete only the top section (reporting for section 6056)

5. Insurers and other providers of health coverage will complete only the bottom section (reporting for section 6055)

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• GENERAL METHOD Company Transmittal Return - (IRS Form 1094-C) Employee Statements - ( IRS Forms 1095-C)

1. Information about the Employer offering coverage, including contact information

2. The number of FT Employees for each month3. Information about each FT Employee, including the

taxpayer identification number4. Information about health coverage offered to FT

Employees, by month5. Information on Employee’s share of the lowest cost

monthly premium for self-only coverage

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• SIMPLIFIED OPTION FOR EMPLOYER REPORTING Available to Employers that provide a “Qualifying

Offer” to their FT Employees.1. File Forms 1095-C providing basic information

on each FT Employees on an annual basis along with a code indicating the Employee received a “Qualifying Offer” for all 12 months of the applicable year

2. Details in the IRS Final Regulations published on 3/10/14: “Information Reporting by ALEs on Health Insurance Coverage Offered Under Employer-Sponsored Plans”

3. http://federalregister.gov/a/2014-05050 23

1. For Employers with at least 50, but fewer than 100 FT Employees & FTEs during business days in 2014

No ALE penalty payments will apply for any calendar month during 2015

2. EM still applies to Employers with 100 or more FT Employees & FTEs in 2015

3. Employers with over 100 Employees can avoid the Failing to Offer Coverage penalty

If during 2015 they offer coverage to 70% of FT Employees

By 2016, these Employers must offer coverage to 95% of FT Employees 24

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