Category: Affordable Care Act
Under the ACA employers were required to provide existing employees with a copy of a Model Notice, depending on whether you offer insurance or not. The notices can be found here. Click here to read the technical release that explains the use of these notices. A FAQ is provided at http://www.dol.gov/ebsa/faqs/faq-noticeofcoverageoptions.html. You must provide these notices to new employees within 14 days of employment. There is currently no penalty for not providing these notices so don’t sweat it if you do not, but it remains good practice to do so. Lastly, if you intend to provide them electronically, make sure you meet the technical requirements identified in this memo.
Congratulations on your appointment. I wish to briefly share what the overall concerns are of the thousands of private company business owners that use our program and that I have had the chance to speak to over the last 14 years. 90% of the companies we work with have between 15- 500 employees. One of the few sectors of the economy with real job growth! So, here you go:
- Allow me to grow my business. Sounds simple, and straightforward, but I can tell you the general feeling is that the government doesn’t support, but rather impedes, this growth. The fact you mention moving away from an adversarial approach is a great start! As corny as it may sound, it is time to start playing win/win.
- Allow me to hire people I can trust. This means inquiries like criminal background, financial, and medical backgrounds are relevant. For example, I can’t trust a felon in general and if I want to engage in a compassionate act and give somebody a second chance then that should be my choice, not a government requirement. This is not an act of discrimination on the part of any employer but one of legitimate concern. Who wants to hire a trouble maker or potential claim? More than anything, employers want to be able to hire on the basis of skills and character: the building blocks of trust.
- Allow my people to be productive. For example, I have worked with JAN (Job Accommodation Network) and have a great deal of respect for the work they do and for people with real disabilities trying to be productive. Unfortunately, I have seen far too many people pull out the disability/discrimination/retaliation card as soon as they realize they may be fired for non-productivity at a job they gave up on years ago. Employers are being told they can’t really understand the nature of a disability but only its limitations. Getting independent medical information is very difficult under the law. As a result of this, well intentioned employers, who are in fact concerned about a worker’s health, have learned that no good deed goes left unpunished. The lesson they often learn is not to proactively offer help because it can and will be used against them.
- Don’t drag me through a frivolous lawsuit simply to satisfy a political agenda. We don’t have the time or money for that. For example, the EEOC and NLRB in particular have “pushed too far” and I’m a former plaintiff’s attorney saying this. For example, I don’t want the NLRB to waste my tax dollars expanding NLRA precedent to protect some disgruntled loser who tweets some seriously damaging information while sitting in the parking lot on his break to another worker who should be getting their job done. This is not “concerted activity” as intended by the laws passed more than 60 years ago designed to protect workers who wanted to put in a hard day’s work for fair pay. It’s simply more social media nonsense dragged into the workplace. And…it is really the NLRB/Administration agenda to get rid of “at-will” employment? Really??
- Lastly, the ACA is a mess. Of course, employers are not in the job of being responsible for the health of others outside legitimate safety concerns. But for now it’s the law so we are stuck with it and as the Administration had to finally concede, it’s confusing as all heck, even to the regulators. I can tell you that many employers and their brokers remain confused about what to do. Pay or play calculators, FAQ’s, checklists, audits, webinars, and more can be used to support the EBSA website.
Let me conclude by saying I understand there are in fact bad people who care neither about their employees or legitimate laws designed to protect them. Most folks I know have zero sympathy for these people. Most business owners I know want to and try to do things right, do care about people, and want a mutual success. What they and I don’t want to see is an agenda that supports anything but good work.
I wish you the best in your new position; our country needs you to be successful.
Don Phin, Esq.
President of HR That Works
P.S. Perhaps you can also get the website to work so folks can really leave you comments. I tried to do so four times but it kept saying I can’t do basic math right!
The IRS has released a Transitional Guidance Notice. Bottom line: once the information reporting rules have been issued, employers and other reporting entities are encouraged to voluntarily comply with the information reporting provisions for 2014. This transition relief through 2014 for the information reporting and Employer Shared Responsibility Provisions has no effect on the effective date or application of other Affordable Care Act provisions.
The Department of Labor’s Employee Benefits Security Administration updated the Affordable Care Act information on its website with the following:
- Final rules regarding the Coverage of Certain Preventive Services, available at www.dol.gov/ebsa/pdf/coveragepreventiveservicesfinalrule.pdf
- HHS news release, available at http://www.hhs.gov/news/press/2013pres/06/20130628a.html
- HHS Fact Sheet: Affordable Care Act Rules on Expanding Access to Preventive Services for Women, available at http://www.hhs.gov/healthcare/facts/factsheets/2011/08/womensprevention08012011a.html
- HHS Fact Sheet: Women’s Preventive Services Coverage and Non-Profit Religious Organizations, available at http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/womens-preven-02012013.html
- Certification Form for Eligible Organizations: available at www.dol.gov/ebsa/preventiveserviceseligibleorganizationcertificationform.doc and www.dol.gov/ebsa/pdf/preventiveserviceseligibleorganizationcertificationform.pdf
- Updated Guidance on the Temporary Enforcement Safe Harbor, issued June 28, 2013, available at http://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/preventive-services-guidance-6-28-2013.pdf
In an unanticipated announcement by U.S. Department of the Treasury in an blog posting yesterday afternoon, the Obama administration has delayed for a year the employer-mandate, commonly referred to as “play or pay” provision, of the Affordable Care Act (“ACA”). So as to implement the ACA in a “careful and thoughtful” manner this was posted. According to the Treasury “we expect to publish proposed rules implementing these provisions this summer”. We’ll let you know when they do!
Now everyone can take a deep breath. It would be nice for the Administration to get its act together so implementation of these laws don’t cause unnecessary stress and confusion!
The IRS has released information on the employer’s Patient Centered Research Fee tax. As a result of the Affordable Care Act, IRS form 720 has new line on it as follows:
As stated in the instructions
The patient-centered outcomes research fee is imposed on issuers of specified health insurance policies (section 4375) and plan sponsors of applicable self-insured health plans (section 4376) for policy and plan years ending on or after October 1, 2012. Generally, references to taxes on Form 720 include this fee.
Specified health insurance policies.
For issuers of specified health insurance policies, the fee for a policy year ending before October 1, 2013, is $1.00, multiplied by the average number of lives covered under the policy for that policy year. Generally, issuers of specified health insurance policies must use one of the following four alternative methods to determine the average number of lives covered under a policy for the policy year.
1. The actual count method.
For policy years that end on or after October 1, 2012, issuers using the actual count method may begin counting lives covered under a policy as of May 14, 2012, rather than the first day of the policy year, and divide by the appropriate number of days remaining in the policy year.
2. The snapshot method.
For policy years that end on or after October 1, 2012, but that began before May 14,
2012, issuers using the snapshot method may use counts from quarters beginning on or after May 14, 2012, to determine the average number of lives covered under the policy.
3. The member months method and, 4. The state form method.
The member months data and the data reported on state forms are based on the calendar year. To adjust for 2012, issuers will use a pro rata approach for calculating the average number of lives covered using the member months method or the state form method for 2012. For example, issuers using the member months number for 2012 will divide the member months number by 12 and multiply the resulting number by one quarter to arrive at the average number of lives covered for October through December 2012.
Applicable self-insured health plans.
For plan sponsors of applicable self-insured health plans, the fee for a plan year ending before October 1, 2013, is $1.00, multiplied by the average number of lives covered under the plan for that plan year. Generally, plan sponsors of applicable self-insured health plans must use one of the following three alternative methods to determine the average number of lives covered under a plan for the plan year.
1. Actual count method.
2. Snapshot method.
3. Form 5500 method.
However, for plan years beginning before July 11, 2012, and ending on or after October 1, 2012, plan sponsors may determine the average number of lives covered under the plan for the plan year using any reasonable method.
Reporting and paying the fee.
File Form 720 annually to report and pay the fee no later than July 31 of the calendar year immediately following the last day of the policy year or plan year to which the fee applies. If you file Form 720 only to report the fee, do not file Form 720 for the 1st, 3rd, or 4th quarters of the year. If you file Form 720 to report quarterly excise tax liability for the 1st, 3rd, or 4th quarter of the year (for example, filers reporting the foreign insurance tax (IRS No. 30)), do not make an entry on the line for IRS No. 133 on those filings. Deposits are not required for this fee, so issuers and plan sponsors are not required to pay the fee using EFTPS.
Report the average number of lives covered in column (a) and multiply by the rate in column (b). Combine the fees for specified health insurance policies and applicable self-insured health plans and enter the total in the tax column on the line for IRS No. 133.
For more information, including methods for calculating the average number of lives covered, see sections 4375, 4376, and 4377; also see T.D. 9602, which is on page 746 of IRB 2012-52 at www.irs.gov/pub/irs-irbs/irb12-52.pdf. Also see http://www.irs.gov/instructions/i720/ch01.html#d0e128
The DOL claims that the final rules show that the Obama administration “supports wellness programs, which generally are available without regard to an individual’s health status. These include programs that reimburse for the cost of membership in a fitness center; that provide a reward to employees for attending a monthly, no-cost health education seminar; or that reward employees who complete a health risk assessment, without requiring them to take further action.
“The rules also outline standards for nondiscriminatory health-contingent wellness programs, which generally reward individuals who meet a specific standard related to their health. Examples of health-contingent wellness programs include programs that provide a reward to those who do not use, or decrease their use of, tobacco, or programs that reward those who achieve a specified health-related goal, such as a specified cholesterol level, weight, or body mass index, as well as those who fail to meet such goals but take certain other healthy actions.”
In addition the rules increase the maximum reward that may be offered under appropriately designed wellness programs, including outcome-based programs. Health-contingent wellness programs must be reasonably designed, made uniformly available to all similarly situated individuals and accommodate recommendations made at any time by an individual’s physician, based on medical appropriateness.
The final rules will be effective for plan years beginning on or after Jan. 1, 2014. To learn more go to:
- Final regulations, available at http://www.ofr.gov/OFRUpload/OFRData/2013-12916_PI.pdf
- Workplace Wellness Programs Study: Final Report, available at http://www.dol.gov/ebsa/pdf/workplacewellnessstudyfinal.pdf and the HHS cover letter, available at http://aspe.hhs.gov/hsp/13/WorkplaceWellness/rpt_wellness.cfm
The DOL has issued the regulations on the Affordable Care Act which in part address seasonal workers. As indicated in the regulations these are not limited to agricultural workers or retail workers. Think of workers at golf clubs or summer camps for example.
Section 4980H(c)(2)(B)(ii) provides that if an employer’s workforce exceeds 50 full time employees for 120 days or fewer during a calendar year, and the employees in excess of 50 who were employed during that period of no more than 120 days were seasonal workers, the employer is not an applicable large employer. Notice 2011 36 provided that, for this purpose only, four calendar months would be treated as the equivalent of 120 days. In response to comments, and consistent with Notice 2011 36, these proposed regulations provide that, solely for purposes of the seasonal worker exception in determining whether an employer is an applicable large employer, an employer may apply either a period of four calendar months (whether or not consecutive) or a period of 120 days (whether or not consecutive).
Because the 120 day period referred to in section 4980H(c)(2)(B)(ii) is not part of the definition of the term seasonal worker, an employee would not necessarily be precluded from being treated as a seasonal worker merely because the employee works, for example, on a seasonal basis for five consecutive months. In addition, the 120 day period referred to in section 4980H(c)(2)(B)(ii) is relevant only for applying the seasonal worker exception for determining status as an applicable large employer, and is not relevant for determining whether an employee is a seasonal employee for purposes of the look back measurement method (meaning that an employee who provides services for more than 120 days per year may nonetheless qualify as a seasonal employee). See section II.C.2. of this preamble for a discussion of the application of the look back measurement method to seasonal employees.
For purposes of the definition of an applicable large employer, section 4980H(c)(2)(B)(ii) defines a seasonal worker as a worker who performs labor or services on a seasonal basis, as defined by the Secretary of Labor, including (but not limited to) workers covered by 29 CFR 500.20(s)(1) and retail workers employed exclusively during holiday seasons. This definition of seasonal worker is incorporated in these proposed regulations. The Department of Labor (DOL) regulations at 29 CFR 500.20(s)(1) to which section 4980H(c)(2)(B)(ii) refers, and that interpret the Migrant and Seasonal Agricultural Workers Protection Act, provide that “[l]abor is performed on a seasonal basis where, ordinarily, the employment pertains to or is of the kind exclusively performed at certain seasons or periods of the year and which, from its nature, may not be continuous or carried on throughout the year. A worker who moves from one seasonal activity to another, while employed in agriculture or performing agricultural labor, is employed on a seasonal basis even though he may continue to be employed during a major portion of the year.”
After consultation with the DOL, the Treasury Department and the IRS have determined that the term seasonal worker, as incorporated in section 4980H,is not limited to agricultural or retail workers. Until further guidance is issued, employers may apply a reasonable, good faith interpretation of the statutory definition of seasonal worker, including a reasonable good faith interpretation of the standard set forth under the DOL regulations at 29 CFR 500.20(s)(1) and quoted in this paragraph, applied by analogy to workers and employment positions not otherwise covered under those DOL regulations.
Several commenters suggested that seasonal workers not be counted in determining whether an employer is an applicable large employer. However, because section 4980H(c)(2) requires the inclusion of seasonal workers in the applicable large employer determination (and then excludes them only if certain conditions are satisfied), this suggestion is not adopted.
The Department of Labor (“DOL”) has issued Technical Release 2013-02 outlining employers’ obligations to provide notice to employees of coverage options under the Affordable Care Act’s health insurance exchanges (which the Departments have re-branded as “marketplaces”). The original deadline to provide this notice was March 1, 2013; however, the DOL delayed the requirement pending regulations to be issued at a later date. Although the DOL has still not released the promised regulations, the guidance sets a new effective date of October 1, 2013, the same day that open enrollment on exchanges is scheduled to begin. The DOL said that it issued this guidance in response to employer requests for model notices, as well as to coordinate with recent IRS guidance on minimum value.
Content & Delivery. The guidance reiterates that the notice requirement applies to all employers who are subject to the FLSA. These employers must provide notice to current employees by October 1, 2013. Regarding new employees, the guidance specifies that, beginning on October 1, 2013, employers must provide notice to new employees at the time of hiring. For 2014, however, the DOL will consider notice to be provided at the time of hiring if the notice is provided within 14 days of an employee’s start date. The notice must be provided automatically and free of charge. While the notice must be in written form, it may be provided via mail or electronically (if existing requirements for electronic disclosures are met).
The notice must be written in a manner calculated to be understood by the average employee and must inform employees of the following:
- information regarding the existence of the Marketplace (again, formerly referred to as exchanges), including a description of the services provided by the Marketplace, and the manner in which the employee may contact the Marketplace to request assistance;
- that the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code, if the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs and the employee purchases a qualified health plan through the Marketplace; and
- if the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.
To satisfy the content requirements, model language is available on the DOL’s website at www.dol.gov/ebsa/healthreform. There is one model for employers who do not offer a health plan and another model for employers who offer a health plan for some or all employees. Employers may use one of these models, as applicable, or a modified version, provided the notice meets the content requirements described above.
The language of the model notices is relatively straightforward; however, the notices leave out certain important information that will undoubtedly create additional challenges and frustration for employers’ HR departments. For example, although the content requirements specify that employers must inform employees of the manner in which the employee may contact the Marketplace to request assistance, the model language only directs an employee to the HealthCare.gov webpage for more information. The model notices also are not state specific–i.e. they do not specify what type of exchange will be run in the particular state.
This guidance will remain in effect until the DOL issues regulations or other guidance. The DOL specified that future regulations or other guidance on these issues will provide adequate time to comply with any additional or modified requirements. When that additional guidance will come is unclear; however, the model notices’ approval by the Office of Management & Budget (required under the Paperwork Reduction Act) expires on November 30, 2013.
Deadline for employers to comply with notice requirements is October 1, 2013.
Article courtesy of Worklaw® Network firm Lehr Middlebrooks & Vreeland, P.C.