Solutions to the Affordable Care Act:

Transcription

1 Solutions to the Affordable Care Act: What You Need to Know CenturyLink Joan Brown Associate General Counsel Synergy Services Mark Young SVP, Human Capital Management DENVER FALL 2014 SU MMIT

2 Evaluation How-to: Why? Your feedback drives SIG Event content By signing and submitting your evaluation, you are automatically entered into a prize drawing How? Option 1: App 1. Select Schedule 2. Select Schedule by Day 3. Select Day 4. Select Session 5. Scroll to Description 6. Click on the Evaluation link Option 2: Browser 1. Go to 2. Select Session (#WS09) DENVER FALL 2014 SU MMIT

3 SIG GLOBAL SUMMIT Solutions for the Affordable Care Act and Contingent Labor What you need to know Presented by Joan Brown & Mark Young October 14, 2014

4 Your Speakers Joan Brown Associate General Counsel - Century Link Joan Brown: With Company Since 2003 Practice Exclusively in: - Employee Retirement and Income Security Act - ERISA Employee Benefits - HIPAA ACA Compliance Strategy Team Member Century Link: Headquarters in Monroe, LA Fortune 500 Firm 3rd Largest Telecommunications Company in the United States Global Leader in Cloud Infrastructure and Hosted IT Solutions Multinational Provider of Communications, Data, Voice and Managed Services 4

5 Your Speakers Mark Young SVP, Human Capital Practice - Synergy Services Mark Young: With Company Since 2009 Responsible for: - Internal & External HR - Independent Contractor Classification Compliance - Human Capital Management Consulting for Contingent Labor ACA Compliance Strategy and Implementation Synergy Services: Headquarters in Denver, CO Specialization and focus: - IC Compliance Discovery and Analysis Compliance Validation and Engagement - Employer of Record Services Vendor Compliance Services - Contractor Reutilization Programs - Human Capital Practice - Flexible Workforce Consulting Services 5

6 What Will You Learn Today? Why Labor Supplier Compliance with the ACA should matter to you and your business. Client Case Study: Lessons Learned and Best Practices from an End Client perspective on Supplier Compliance with the ACA. Suggestions on how to work with your Labor Suppliers on Next Step Solutions for ACA Compliance. 6

7 Poll Question: How many of you have been approached by your contingent labor suppliers about the impact of the ACA on your business? 7

8 The Affordable Care Act The Basics of the ACA 8

9 ACA Highlights Pay or Play Mandate - Large Employers Effective 1/1/15 (100+ employees) Pay or Play Mandate - Small Employers Effective 1/1/16 (50+ employees) IRS responsible for policing this law Annual reports due: April 2016 Impacts nearly every single company in America by virtue of the Individual Mandate 9

10 2015 Employer Play or Pay Penalties No offer of minimum essential coverage (MEC) for full-time employees* (and children) - and - At least one employee obtains subsidized exchange coverage Tier 1 Penalty $2,080 annually per total number of FTEs in EIN Offer of MEC but offer is not also Qualifying and Affordable, and FTE obtains subsidized exchange-based coverage Tier 2 Penalty $3,120 annually per each FTE that receives subsidies from an Exchange 10

11 The Affordable Care Act Why Should Labor Supplier Compliance with the ACA Matter to Me? 11

12 Why Compliance Matters Who s on First Base? Yes Co-Employment Classification Matters IRS Common Law Test Solution to avoid ACA Co-Employment Concern: - Treasury Regulation Section H-4(b)(2) and -5(b) - Take Credit for Suppliers ACA compliant plan 12

13 Why Compliance Matters It s Time to Get Ready Supplier s decision to Play or Pay Client is at risk for Supplier s decision to Pay rather than Play Third Party relationships through existing suppliers matter too 13

14 Poll Question: How many of you have a strategy regarding your labor suppliers compliance with the ACA? 14

15 The Affordable Care Act Lessons Learned and Best Practices 15

16 Best Practices CenturyLink Common Law Gut Check Does the client company exercise direction & control over the services of the contingent worker? Does the client have the right to direct and control the services of the contingent worker? IRS 3 main aspects of the Common Law Test: - Behavioral Control - Financial Control - Relationship of the Parties 16

17 Best Practices Possible Consequences if Supplier does not offer compliance coverage (does not Play ) - OR - the offered coverage in not affordable or of minimum value - Worker may go to the Exchange for coverage and identify the client as his/her Common Law Employer 17

18 Best Practices But here s the GOOD News Treasury and IRS provide a Safe Harbor for Clients with Suppliers offering ACA qualifying benefits to their employees The IRS will allow Clients to take credit for Supplier s qualifying plans if the fee the Client pays for workers participating in the Supplier s plan is reasonably higher than the fee for non-participants 18

19 Best Practices Gain Internal Support Educate Senior Leadership Create Cross-Functional Committee - Not just HR and Employee Benefits personnel - Supply Chain / Procurement - Legal Educate Manager/Supervisor Level - Compliant Suppliers - Internal Resource for Questions - Matrices for appropriate actions 19

20 Best Practices Strategize with Suppliers Create Model Contract Language - Require to work with W2s - Require to provide ACA Compliance Coverage - Notice of Rehire of former Employees of Client Reporting Requirements Facilitate greater Collaboration with Suppliers Educate Suppliers on your Requirements - Strategic and Creative Solutions - Transition Plan if unable to meet requirements 20

21 The Affordable Care Act Next Step Solutions 21

22 Next Step Solutions Survey Says Survey your Suppliers - Employment Size: Form Letter from suppliers insurance carrier certifying ACA compliance Business Decision: - Continue services if coverage is not provided? Other Auditing Tools 22

23 Next Step Solutions Consider the HR Issues Discrimination - Hiring Decisions - Continued Engagement - Conversion to Full-Time Privacy - Personal Benefit Elections - Unnecessary Visibility Special Issues Around Retirees - Retiree Benefits 23

24 Next Step Solutions Creating Contracts & Amendments Application of the Co-Employment remedy, Safe Harbor Obligations of the Supplier - Offer of Coverage - Necessary Tracking - Reporting Indemnification 24

25 Next Step Solutions Check Please! How You Are Invoiced Matters - Reporting Requirements - Avoidance of Privacy and Discrimination Issues Invoice Options - Conformity to business needs - 1 solution for multiple suppliers 25

26 Summary Supplier ACA Compliance is Important to You What have other Organizations done to prepare for Jan. 1, 2015 Preparation Suggestions 26

27 THANK YOU! QUESTIONS? Joan Brown CenturyLink Associate General Counsel Mark Young Synergy Services SVP, Human Capital Practice The Next Generation Flexible Workforce

28 Session #WS09 Solutions to the Affordable Care Act: What You Need to Know Speakers: Joan Brown CenturyLink Associate General Counsel Mark Young Synergy Services SVP, Human Capital Practice DENVER FALL 2014 SU MMIT