Affordable Care Act

1. Implementation Issues for Kentucky School Districts Affordable Care Act

2. Presenters • Susan Barkley Susan.Barkley@education.ky.gov 502-564-3930 extension 4437 • Jan Johnston Jan.Johnston@pendleton.kyschools.us 859-654-6911 • Melissa Sullivan Melissa.Sullivan@education.ky.gov 502-564-3846 extension 4415

3. Resources • KDE website: Health and Life Insurance Benefits and Flexible Spending Accounts page • http://education.ky.gov/districts/FinRept/Pages/Health-and-Life-Insurance-Benefits-and-Flexible-Spending-Accounts.aspx • Implementation Guide • Timekeeping documentation • KEHP FAQs and Responsibility Chart

4. Disclaimer • The Guide is only one of many resources • IRS continues to issue regulations on ACA • Information in the Guide could become inaccurate • Not comprehensive of all aspects of ACA • Consult legal counsel

5. Whose Responsibility? • Districts: • Eligibility and offers of coverage (Play or Pay) • Nondiscrimination • Marketplace Notice • Employer Reporting • KEHP: • Affordable coverage • Adequate coverage • Plan details and options

7. Failure to comply = PENALTY

8. Action Steps Repeat Annually

9. Who are Employees? An employee relationship exists when the employer has the right to control and direct the individual who performs the services and the details and means by which the result is accomplished.

10. Who are employees?

11. “Large” Employer • Full-time and FTEs = 50 or more • Most KY school districts are large • ACA applies to all large employers

12. “Hours of Service” • Hours actually worked (or equivalency) • Hours paid or entitled to be paid • Vacation • Holiday • Sick leave • Disability • Jury duty • Military duty

13. Who Do We Need to Worry About?

14. Equivalency Hours

15. Employment Breaks • Breaks at least 4 consecutive weeks in length • Cannot count zero hours worked • Exclude from average hours of service Examples: summer break, FMLA leave

16. Eligibility Break Point • Step 1 – calculate number of days excluding breaks of > 4 weeks • Step 2 – multiply 5.997 by the number of days from Step 1 and then divide by 8 5.997 * 207 / 8 = 154 days

17. Do I need to track actual time? • To limit the number of employees tracking actual time worked: • Limit number of days/year • Limit number of days/week • Use equivalency of 8 hrs/day

18. Board Action • Measurement, administrative, and stability periods • Limitation of days worked • Track actual hours or use equivalency • Terminate subs that refuse assignments

19. Full-time Employees for ACA Employees who average 30 hours of service per week or 130 hours of service per month

20. Who is Full-time? Average hours of service over measurement period • Max 12 months • Recommended: October 3, 2013 – October 2, 2014 • Don’t forget to exclude breaks >4 weeks

22. Recommended Measurement Periods Continually measuring

23. What About Mid-Year Hires? • InitialMeasurement Period • Begins the first day of the month after hired • Max 12 months • Transitions to standard measurement period

24. Initial Measurement Period Note that the standard measurement period begins during the initial measurement period; both periods occur simultaneously

25. Offering Coverage • ACA requires coverage for full-time employees and dependent children – not spouses • Coverage must begin Jan 1, 2015 • Offer must be made, employee can decline • Maintain documentation • Annual requirement

26. Offering Coverage • If employee is expected to work full-time must offer coverage at the time of hire • If it is unknown if the employee will have an average of 30 service hrs/week or 130 service hrs/month, use the measurement period

27. Offering Coverage • Full-time during Measurement Period = Coverage during Stability Period regardless of hours of service during Stability • NOT full-time during Measurement Period = NO coverage during Stability Period regardless of hours of service during Stability

28. COBRA

29. Funding • State funds non-federal employee premiums • If health insurance appropriation is inadequate, funds come from SEEK • Avoid a blanket policy to offer coverage to all employees

30. Penalty • If no Substantial Compliance • 95% or no more than 5 full-time employees • Penalty is • Number of full-time employees minus 30 • Multiplied by $167 per month

31. Nondiscrimination • Cannot provide more for highly compensated employees • Example: paying the superintendent’s employee premiums • Penalty is • Number of employees minus the superintendent • Multiplied by $100 per day until in compliance • Solution: tax the additional benefit

32. Employer Reporting • Will be required • IRS guidance not finalized • More information forthcoming

33. Your Good Questions