Implementing the ACA at Your Community College Conference/2014/1E ACA Presentation.pdf ·...
Transcript of Implementing the ACA at Your Community College Conference/2014/1E ACA Presentation.pdf ·...
Implementing the ACA at YourCommunity College
Association of California Community College Administrators
Implementing the ACA at YourCommunity College
Association of California Community College Administrators
Annual ConferenceFebruary 26, 2014
Annual ConferenceFebruary 26, 2014
Presented by
School Services of California, Inc.
Michelle McKay Underwood, Director, Legislative Services
Sheila G. Vickers, Vice President
Long Beach City College
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Long Beach City College
Dr. Cindy Vyskocil, Associate Vice President, Human Resources
Julie Kossick, Director, Human Resources
Diane Bangs, Human Resources Manager, Academic
Affordable Care Act
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
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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 fromJanuary 1, 2014)
Employer shared responsibility payments: upon plan renewal in 2015(delayed from 2014)
Delayed to 2016 if 50 to 99 full-time employees
Affordable Care Act
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 www.coveredca.com
Employer reporting requirements:
All employers must annually report certain information to the Internal Revenue Service (IRS) about employees, dependents, and their health
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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
Employer Shared Responsibility Payments
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
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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
“Full Time” for Coverage Purposes
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
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(52 weeks x 30 hours)/12 months = 130 hours per month
“Full Time” for Coverage Purposes
“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
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Then the employee is eligible for benefits during the coming “stability period”
“Full Time” for Coverage Purposes
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
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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
“Full Time” for Coverage Purposes
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
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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
“Full Time” for Coverage Purposes
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:
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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
Potential Penalties
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
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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
Potential Penalties
2014 Poverty Guidelines (48 Contiguous States)
Number in Family Poverty Guideline 400% of Poverty Guideline
1 $11,670 $46,680
2 $15,730 $62,920
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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)
Potential Penalties
Penalties are determined and assessed on a monthly basis:
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Preparing for Implementation
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?
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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
Preparing for Implementation
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
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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
Collective Bargaining Implications
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 or130 per month?
Is coverage also offered to dependents?
Is there a plan offered that meets the “minimum value” test?
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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?
Collective Bargaining Implications
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
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Do the cost/benefit analysis of coming into compliance and develop your strategy early
Initial measurement periods are likely happening now!
Long Beach City College (LBCC)
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
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regulations, collective bargaining agreements, and hiring practices
You should consult with your legal counsel before adopting any of the following business practices
Affordable Care Act Analysis
Analysis of current practice
Hiring guidelines
Stipends
Athletic Coaches
67% (Education Code) and how it relates to ACA regulations
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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
Affordable Care Act Plan
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
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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
Affordable Care Act Implementation
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
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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
Classified Employees
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
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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)
Part-Time Faculty
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
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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)
Part-Time Faculty/Substitutes
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
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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
Part-Time Faculty/Substitutes
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
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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
Part-Time Faculty Stipends
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
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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
Athletic Coaches
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
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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
Negotiations Implications
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
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it would not be negotiable
Thank You!Thank You!