Implementing the ACA at Your Community College

Transcription

1 Implementing the ACA at Your Community College Association of California Community College Administrators Annual Conference February 26, 2014

2 Presented by 1 School Services of California, Inc. Michelle McKay Underwood, Director, Legislative Services Sheila G. Vickers, Vice President Long Beach City College Dr. Cindy Vyskocil, Associate Vice President, Human Resources Julie Kossick, Director, Human Resources Diane Bangs, Human Resources Manager, Academic

3 Affordable Care Act 2 Federal health care reform was enacted on March 23, 2010: House of Representatives (H.R.) 3590, The Patient Protection and Affordable Care Act (ACA) H.R. 4872,The Health Care and Education Affordability Reconciliation Act of 2010 Provisions are being phased in over a number of years The most significant changes become effective in 2014 and 2015: Individual mandate: January 1, 2014 Employer reporting requirements: January 1, 2015 (delayed from January 1, 2014) Employer shared responsibility payments: upon plan renewal in 2015 (delayed from 2014) Delayed to 2016 if 50 to 99 full-time employees

4 Affordable Care Act 3 Individual mandate: Individuals not provided health benefits by their employer must purchase through the Exchange or pay a penalty California s Exchange is Covered California Employer reporting requirements: All employers must annually report certain information to the Internal Revenue Service (IRS) about employees, dependents, and their health benefits coverage Employers with 50 or more employees must report additional details to the IRS about the health benefit plans, coverage, and costs Employer shared responsibility payments: Employers with 50 or more employees will be required to provide health benefits to full-time (30 or more hours per week) employees or pay up to a $2,000 to $3,000 penalty per employee, depending on the situation

5 Employer Shared Responsibility Payments 4 Important definitions: Applicable large employer is defined as employing at least 50 full-time equivalent employees Where full time is defined as employed at least 30 hours per week Coverage of minimum value is defined as covering at least 60% of the total allowed cost of benefits that are expected to be incurred under the plan Affordable means that the lowest cost minimum value plan offered does not exceed 9.5% of annual household income Safe harbor rules allow employers to use W-2 wages or other options

6 Full Time for Coverage Purposes 5 Assuming that your agency is an applicable large employer Then each full-time employee (and dependents) must be offered coverage of minimum value that is affordable or penalties may result Full time is defined as working, or hired and reasonably expected to work, at least 30 hours per week or 130 hours per month: (52 weeks x 30 hours)/12 months = 130 hours per month

7 Full Time for Coverage Purposes 6 All other employees part time, temporary, substitute, variable hour, seasonal based on their hours of service during a standard measurement period, otherwise referred to as a look back period If employee s hours of service averaged at least 30 per week or 130 per month during the standard measurement period Then the employee is eligible for benefits during the coming stability period

8 Full Time for Coverage Purposes 7 Standard measurement period is determined by employer Can be anywhere from 3 to 12 consecutive months Stability period must be at least six months and no shorter than the standard measurement period In recognition of the administrative time required to look back and measure employee hours and then get eligible employees enrolled in benefits, an administrative period of up to 90 days is allowed In between the standard measurement period and the stability period

9 Full Time for Coverage Purposes 8 For new employees, the stability period must be at least as long as for ongoing employees But the measurement period and administrative period may be shorter for the first year the initial measurement and administrative periods do not have to follow the calendar for ongoing employees Must be completed by the end of the month following the one-year anniversary of the hire date Example: Hired on May 10 of year 1 the combined initial measurement and administrative periods cannot go past June 30 of year 2 This is shorter than what is allowed for ongoing employees up to 12 months for measurement and 90 days for administration

10 Full Time for Coverage Purposes 9 Special rules for educational institutions Employees are not seasonal due to school breaks Hours must be averaged over employment breaks Employment break is defined as a period of at least four consecutive weeks Adjunct faculty at community colleges: Must use a reasonable method for crediting hours of service relative to that of full-time faculty Must include not only credit hours of instruction but also other expected hours office hours, preparation time, etc. Must credit at least 2¼ hours total for each hour of teaching, to represent preparation and grading time Plus additional time for office hours or other required activities

11 Potential Penalties 10 There are three potential penalties: A penalty for not offering coverage to more than 5% of employees (for smaller employers, more than five employees) that qualify as full time For 2015, if 100 or more employees, must offer to at least 70% A penalty for offering coverage that does not meet the minimum value test A penalty for providing coverage that does not meet the affordable test Penalties only apply if at least one employee purchases coverage through the Exchange and receives a subsidy or tax credit To qualify for a subsidy, the employee s household income cannot exceed 400% of the federal poverty level Depends on the size of the family

12 Potential Penalties Poverty Guidelines (48 Contiguous States) Number in Family Poverty Guideline 400% of Poverty Guideline 1 $11,670 $46,680 2 $15,730 $62,920 3 $19,790 $79,160 4 $23,850 $95,400 5 $27,910 $111,640 6 $31,970 $127,880 7 $36,030 $144,120 8 $40,090 $160,360 (add $4,060 for each additional person beyond 8)

13 Potential Penalties 12 Penalties are determined and assessed on a monthly basis:

14 Preparing for Implementation 13 Employers will need to do some analysis in order to prepare for the implementation of these provisions: Are you an applicable large employer? If not, then stop here Do you have 100 or more full-time equivalent employees? Are substantially all employees that qualify as full time offered coverage? Employer must determine standard measurement, administrative, and stability periods Implement a mechanism to track and measure employee work hours to determine whether they become eligible to be offered coverage

15 Preparing for Implementation 14 When counting hours of service, be sure to include all assignments for each individual employee Important to get this right because the penalty is assessed for all employees (minus the first 30) Are plans at least offering minimum value coverage, and is the employee s contribution to the premium for individual coverage under the lowest cost plan affordable? If not, then assess the cost/benefit of offering an affordable option versus paying potential penalties when an employee goes to the Exchange and qualifies for a subsidy

16 Collective Bargaining Implications 15 Review heath benefit language in collective bargaining contracts to ensure compliance with the ACA: Is coverage offered to employees working at least 30 hours per week or 130 per month? Is coverage also offered to dependents? Is there a plan offered that meets the minimum value test? And do employee contributions for individual coverage under that plan meet the affordable test?

17 Collective Bargaining Implications 16 Are the measurement, administrative, and stability periods negotiable? The regulations say that the employer decides How will this impact your strategy for staffing with part-time employees? The bottom line: Do the cost/benefit analysis of coming into compliance and develop your strategy early Initial measurement periods are likely happening now!

18 Long Beach City College (LBCC) 17 Disclaimer The information in the next section is based upon LBCC s assessment of our current collective bargaining language, administrative regulations, and current hiring practices Implications for your District may differ based upon your administrative regulations, collective bargaining agreements, and hiring practices You should consult with your legal counsel before adopting any of the following business practices

19 Affordable Care Act Analysis 18 Analysis of current practice Hiring guidelines Stipends Athletic Coaches 67% (Education Code) and how it relates to ACA regulations Preparation time/grading/office hours (part-time faculty) Current employee trends Classified limited-term employees Benefits analysis (affordable, employee and dependents, Cadillac) Notices

20 Affordable Care Act Plan 19 Designed plan to meet the ACA requirements Provide training to administrators on requirements of law Examine district hiring policies/practices Review current benefit structure Examine how employees are currently used districtwide Examine and create new business processes to support the ACA Create a new employee tracking system (PeopleSoft) for auditing Hire a Human Resource (HR) Analyst to calculate weekly hours of service and provide daily guidance to Instructional Deans for approval of assignments and substitutes

21 Affordable Care Act Implementation 20 Actions taken Vice Presidents, Deans, and Department Heads trained by HR Mandatory notice sent by Payroll (September 2013) Audit binder created by HR Reporting tool for audit purposes created and currently being tested by IITS Board approval of Safe Harbors (may be a negotiable item) Forms created Stipend request Temporary employee Professional experts Monthly reporting and analysis underway

22 Classified Employees 21 Permanent Classified Employees Master Agreement provides benefits at 20 hours or greater Temporary Classified Employees (Limited Term) Limited to 6-month assignment (Merit System) Exempt from the Classified Service Limited to 19 hours per week in most cases Substitutes No longer permitted to substitute for duration of absent employee limited to six months Dual assignments Prohibited (blended rate in spring 2012)

23 Part-Time Faculty 22 Instructional faculty limited to a 67% assignment (per Education Code) for fall, spring, winter, and summer sessions Note: 67% Rule (Education Code) is a different analysis than the ACA and must be analyzed in addition to ACA requirements ACA hours for classroom teaching calculated by the number of weekly lecture hours listed in a college catalog for each course (then add 1.25 hours for each lecture/lab hour to account for preparation and grading) plus office hours and other required duties Counselors, Librarians, and Instructional Specialists are limited to 21 hours per week (no additional calculation needed unless the faculty member is teaching in the classroom) No double or triple classes can be offered to part-time faculty during Winter Intersession/Summer Session (or as substitutes)

24 Part-Time Faculty/Substitutes 23 Instructional faculty working a 67% assignment (per Education Code) during any semester could exceed the ACA weekly limit due to substitute assignments ACA hours for classroom substitute teaching is calculated by the number of weekly lecture hours (then add 1.25 hours for each lecture/lab hour to get attributed hours) Long-Term Substitutes (LTS) and his/her dependents are given benefits for one year or one semester of full-time teaching LTS will become increasingly more advantageous given ACA restrictions LTS are now required to be benefitted (employee plus dependents only) An LTS must be used in accordance with Education Code requirements Counselors, Librarians, and Instructional Specialists are limited to four substitute hours per week if subbing for non-instructional assignments

25 Part-Time Faculty/Substitutes 24 Strategies for addressing substitute needs within a department Immediately increase the number of approved part-time faculty to teach in each discipline in order to have part-time faculty who are approved and available to serve as substitutes when substitutes are needed Have a number of part-time faculty in the discipline that have a less than 67% assignment who can be made available to serve as substitutes Work with department heads from other area community colleges to recruit and hire part-time faculty from their college who can serve as emergency substitutes for LBCC A part-time faculty member who currently has a 67% assignment may only be used as a substitute instructor upon approval Depending upon the calculation, a part-time instructor working less than a 67% assignment may be eligible to substitute, but you will have to verify the hours

26 Part-Time Faculty Stipends 25 All stipends need to be converted to hours per week and an hourly rate A stipend form needs to be completed and signed by the employee prior to the start of the assignment LBCC s stipend form includes the following information: Total stipend amount Description of assigned duties Estimated number of weeks to complete assignment Hours per week Signature of Dean/Area Manager Signature of employee agreeing to terms and conditions of stipend assignment NOTE: Stipend hours must be added to teaching hours for ACA calculation

27 Athletic Coaches 26 Part-time Head Coaches Permitted to work one Inter-collegiate Athletics Class per semester (11 weekly lecture hours x 2.25 = 24.75) Develop a signed (annual) employment contract for stipend amount to define duties and compensate each coach for ancillary coaching duties over a 12-month period No real solution other than to provide benefits if they teach and coach Part-time Assistant Coaches No teaching assignments Professional expert hours not to exceed 25 hours per week

28 Negotiations Implications 27 Providing benefits to classified employees working beyond ACA limits Stipend amount for part-time head coaches Safe Harbor (Look Back) period may be negotiable depending on how you are using it (if you use it as a determination for who qualifies for benefits it would be negotiable); if used to assess how many full-time employees the District has it would not be negotiable

29 Thank You!