2018 Eligibility Determination

Transcription

1 2018 Eligibility Determination February 6, 2018 Using Integrity Data s ACA Compliance Solution to Understand Measurement Periods & Reporting under the Employer Mandate of the Affordable Care Act

2 Agenda Standard Measurement period Initial Measurement Period Interpretation of the Reports Q&A Resources 2 Integrity Data All rights reserved.

3 ACA Filing Dates for 2017 March 2 nd C to the Employees February 28 th - Paper Filing to IRS April 2 nd - Electronic Filing to IRS 2017 Good-Faith Effort Extended 3 Integrity Data All rights reserved.

4 Resources 4

5 Help Right where you need it! Integrity Data All rights reserved. 5

6 Affordable Care Act reporting FAQs on Integrity Data s site (cont): 6

7 Find slide decks and recordings from past ACA User Group lessons on this page: Password: ACAUG 7

8 A different type of ACA tracking to keep in mind Always this address so that we can track your concern and see that everyone who must weigh in on the answer can do so. * Recommended way to get Support questions answered promptly and fully. Integrity Data All rights reserved. 8

9 Next lessons in our ACA User Group series February 13 th Open Q&A for ACA tracking and reporting Fulfillment: Have us mail or your 1095-Cs for you February 27 th Open Q&A for tracking and reporting E-Filing basics March 6 th & 20 th E-Filing ACA forms to the IRS and making corrections to 2017 data 2:30 p.m. Eastern 1:30 p.m. Central 12:30 p.m. Mountain 11:30 a.m. Pacific 10:30 a.m. Alaskan 8:30 a.m. Hawaiian-Aleutian

10 Make 2017 reporting even easier! Fulfillment Services: We can , print and mail 1095-Cs for you this filing season. Find out more at Premium Support Services: Not sure what kind of support you have? Contact to find out To see a list of premium support services, click here. 10

11 ACA REDEFINITIONS Hours and Full-time employee HOURS means hours of service In addition to paid hours that are clocked on the job, this includes situations that are not paid but during which the employee is available to the employer. FULL-TIME means 130 hours of service in a month the monthly equivalent of at least 30 hours of service a week 11

12 Hours of service not just paid hours TIME TO INCLUDE: Jury duty* Military deployment* FMLA absence* Leave of absence Vacation Holiday Illness Incapacity Layoff * These are special unpaid leave where you can either not factor the absence in your eligibility calculation or credit the employee with the average hours they worked while not on special unpaid leave. 12

13 Managing risk through measurement periods for ACA compliance 13

14 Fine points about the Look-Back Method: Standard Measurement Period 14

15 Look-back measurement method An employer may determine the status of an employee as full-time during a future period (referred to as the stability period), based upon the employee s hours of service in a prior period (referred to as the measurement period). This method is the measuring tool for workforces where employees hours vary. When schedules are less certain, employers can identify full-time employees before the beginning of a potential coverage period. 15 Integrity Data All rights reserved.

16 Look-back measurement method Not dependent on a single month but averages hour of service over a period of time. Measurement Period Admin Stability Period Measurement periods can be between 3 and 12 months Administrative period limits differ Stability periods cannot be less than 6 months and cannot be greater than the measurement period

17 Three elements of the Standard Measurement Period Setup Stability Period Administrative Period Standard Measurement Period 17 Integrity Data All rights reserved.

18 Standard Measurement (SM) periods Standard Measurement period Can be between 3 and 12 months Testing for ongoing variable-hour employees To be tested, the employee must have worked the entire measurement period Administrative period can be up to 3 months Stability period cannot be less than 6 months but not greater than the measurement period length

19 Standard Measurement Period Testing period, pass-fail period When employees are employed for the full duration of the Standard Measurement Period and average 30 hours per week, they are now eligible for health insurance coverage. Example: Stability Period = through Administrative Period = through Standard Measurement Period = through Integrity Data All rights reserved.

20 Administrative Period The time allotted to get stuff done Finish running payroll for the previous month Upload transactional data into the cloud Run eligibility reports Make an offer of coverage to the employee 20 Integrity Data All rights reserved.

21 Stability Period Your health insurance plan year When an employee accepts the health insurance, the employer must continue coverage for the full length of the Stability Period, even when the employees hours drop below 130 hours in a month during that period. 21 Integrity Data All rights reserved.

22 Fine points about the Look-Back Method: Initial Measurement Period 22

23 Three elements of the Initial Measurement Period Setup Stability Period Administrative Period Initial Measurement Period 23 Integrity Data All rights reserved.

24 Initial Measurement (IM) period All new variable-hour employee will be tested in an initial measurement period tied to their start date can be between 3 and 12 months. Employee must complete the entire initial measurement period before eligibility can be determined Administrative period: initial measurement period and administrative period cannot be greater than 13 months Stability periods for initial measurement and standard measurement periods should be the same length

25 Initial Standard Measurement Period Interaction 25

26 Testing is continuous When one measurement period ends, another measurement period begins There can be no gaps in coverage Measurement Period Admin Stability Period Measurement Period Admin Stability Period Eligibility for coverage is now like a light switch it can be turned on and off depending on each test s outcome. For variable-hour employees, testing to be eligible in a measurement period does not mean you reclassify them as full-time permanently.

27 Transition from IM to SM period testing All variable-hour employees who are tested in their initial measurement period will also be tested in the next SM period IM Measurement Period Admin IM Stability Period SM Measurement Period Admin SM Stability Period Once the IM period is completed, the employee will be tested in SM periods along with all ongoing variable-hour employees If the employee tested eligible in their IM period but not eligible in the subsequent SM period test, offer of coverage must be maintained through the entire IM stability period.

28 Measuring Hours of Service Stability Period = Time that is reportable to the IRS Corresponds to Plan Year Admin = Open Enrollment Period Measurement = Period of time used to determine eligibility Over 130 hours/mo.? New Hire New Hire Measurement Admin Stability Measurement Admin Stability Measurement Admin Stability Measurement Admin Stability

29 Another factor related to Measurement Periods The ACA states that if you reasonably expect an employee to work, on average, at least 30 hours per week upon their start date, you must offer them access to health coverage no later than the first day after their first three full months of employment. Notice here that there is no measurement period. 29 Integrity Data All rights reserved.

30 Reports that help you be proactive Standard Measurement Period Analysis If you are looking to manage eligibility by monitoring the 30-hour threshold, monthly analysis and forecasting are musts. The report for a Standard Measurement Period Analysis is a critical tool to use. Integrity Data All rights reserved. 30

31 Reports that help you be proactive Initial Measurement Period Analysis If you are looking to manage eligibility by monitoring the 30-hour threshold, monthly analysis and forecasting are musts. The report for a Initial Measurement Period Analysis is a critical tool to use. Integrity Data All rights reserved. 31

32 Setup for Initial Measurement Period Analysis. Integrity Data All rights reserved. 32

33 Monthly Initial Measurement Eligibility Report If you are looking to manage eligibility by monitoring the 30 hour threashhold, monthly analysis and forcasting are essential. The report for a monthly Initial Measurement Eligibility Report is a criticaltool to use Integrity Data All rights reserved. 33

34 Another report that helps you be proactive Often overlooked when using the look-back measurement method, stability periods also need to be monitored monthly. Integrity Data All rights reserved. During an Initial Measurement stability period, an employee may lose their eligibility in the next Standard Measurement Period test. Determination of continued coverage must be decided. 34

35 Special Rules around Employment Status changes 35

36 Employee moves from full-time to part-time Companies cannot automatically drop coverage when employee classification changes Employees that go from full-time to part-time will be tested as if they were a variable-hour employee from the beginning

37 Employees move from part-time to full-time Company must offer them coverage no later that the first day of the month after their first three full months at the new full-time position

38 Rehire break-in-service rules The break-in-service rule applies to both the look-back and the monthly measurement methods. Returning employee can be classified a new hire provided they: 1. Had a break in service for 13 consecutive weeks, if the employer is not an educational institution 2. Had a break in service for 26 consecutive weeks, if the employer is an educational institution 3. Had previously been employed for at least 4 weeks and their absence of service was greater than their previous service Rule of Parity Classifying employee as a rehire (new employee) or continuing them as an ongoing employee is at sole discretion of employer. The ACA rehire rules do not affect other areas of a company s benefits. They are limited to health benefits.

39 Returning employees that would have been in a stability period If a returning employee had tested eligible for health coverage and they returned to service within the stability period they would have been entitled to, the company must honor that stability period. Company would have until the first day after the employee s first three full months after return.

40 Questions? 40

41 Thank you for joining us For clarifications on details presented and to suggest topics for future ACA User Group calls: Keith Schmidt To add team members to our notification list for ACA User Group calls: Lindy Belley

42 Integrity Data s publications and presentations are designed to make employers aware of IRS reporting requirements under the Affordable Care Act, best practices for compliance with those requirements, and the consequences of noncompliance. This material is intended to provide accurate information as of the date posted. It is provided with the understanding that neither Integrity Data, nor the authors and presenters, are rendering legal or accounting advice. With respect to your organization s decision making for Affordable Care Act compliance, review the information presented with legal counsel specializing in employee benefits law. 42

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