PREPARING FOR SHARED RESPONSIBILITY Rise to the Challenge and Act Now.

PREPARING FOR SHARED RESPONSIBILITYRise to the Challenge and Act Now

Agenda – Three Things & A Story

2 © Copyright 2013 ADP, Inc. Proprietary and Confidential Information.

What is the ACA How it will affect you

What you can do about it But…. first a story!

Who Moved My Cheese


Two little People

Hem & Haw

Two little mice:

Sniff & Scurry

Who Moved My Cheese

Hem & Haw We know the story…..

Didn’t know or didn’t care that

the cheese was going to run out

Not aware that things might

change


Who Moved My Cheese

Sniff & Scurry They were aware changes were

happening

Didn’t expect things to stay the

same

Didn’t get wrapped up on why

the change

Proactive to find new cheese


Who Moved My Cheese


The Moral of the story

Sooner or later we will experience change

When you can read the writing on the wall you can do well in changing times!

Disclaimer

This presentation is not:

Legal advice

Tax advice

The final word on Health Care Reform

A political opinion


Why the ACA – Why it came to be?

What: The Patient Protection and Affordable Care Act will ensure that all Americans have access to quality, affordable health care and will create the transformation within the health care system necessary to contain costs.

Why:•Healthcare crisis: Over 30 to 60 Million American’s don’t have access to Healthcare.

•Cost: Healthcare costs are skyrocketing, rising 2 -3 x of inflation.

•Coverage denial: Too many Americans were being denied coverage (pre-existing conditions, etc).

• Lack of scale: Our current healthcare system is not efficient.

How:•Business: Any large employer (50+ employees) must offer health insurance or pay a penalty.

•State Government: State Government is required to set up healthcare exchanges to more efficiently distribute healthcare to it’s constituents.


Act Now – Employer Shared Responsibility

What Do Employers Need to Consider Now?Workforce Planning


Employer

50 or more full-time equivalents (FTEs)

Employer offers coverage

Tax credit obtained by at least one full-timer because coverage is

“unaffordable” or does not meet “minimum value

Annual penalty of $3,000 per full-timer

who receives the credit

Tax credit not obtained by any full-timer

Employee Elects Plan

No employer penalty

Employee rejects Plan

Employee buys own plan

No employer penalty

Employee opts to forgo insurance and

pay individual assessment

No employer penalty

Employer does not offer coverage

Tax credit obtained by at least one full-timer

Annual penalty of $2,000 X full-timers (after the first 30*)

Tax credit not obtained by any full-timer

No employer penalty

Less than 50 full-time equivalents (FTEs)

No employer penalty

Darden Restaurants

Experimented with more part time employees last fall

Sales dropped:

Lack of consistent workforce

Difference in talent (part time vs. full)

Did this effect their service profit chain?


After Pay or Play – What else?

Notice of Exchange

Minimum Value Requirements (60%)

Automatic Enrollment

Benefit Costs included on your W-2

Medical Loss Ratios

Dependent coverage to 26 year olds

Expansion of Wellness incentives

Cadillac Plan - Penalty




Is the company a “large” employer?

How many full-time (30 or more hours of service per week) employees do you have?

Do you have any seasonal employees?

With the new definition of full-time, who will be newly eligible for healthcare coverage?

Will there be an increased cost, based on the newly eligible employees?

Will the company continue to offer healthcare coverage, based on those increased costs?

What other considerations are there when determining whether to continue offering healthcare coverage?

How will employee morale/satisfaction be affected by changes in hours or a decision to not offer healthcare coverage?



Determine number of definite full-time and part-time employees.

Determine number of variable hour employees (those on the bubble around 30 hours per week).

Determine number of seasonal employees and for how many months they are employed each year (using a “good-faith” determination of “seasonal” based on existing DOL guidance).

Run calculations to determine if the coverage is “affordable” - determine whether the cost of self-only coverage is greater than 9.5% of any full-time employee's W-2, box 1 wages.

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ADP Offers an Integrated Approach to Manage Workforce Planning and Administration

© 2013, ADP, Inc. Proprietary and Confidential Information.

ADPTime and Labor Management

ADPReporting and Reconciliation

ADPPayroll

ADPBenefits• Full-Time Status Warnings

• Full-Time Threshold Indicator Based on ACA Definitions

• Work Schedule Dashboard

• Full-Time Status Reporting

• Auto-enrollment Required in 2015

• Enrollment of Eligible Employees

• Coverage Termination

• W-2 Affordability Calculation

• Data to/from Exchanges

• Reporting to Federal Government

• Reconcile Penalties Levied for Exchange Participation

• Deductions and Other Earnings

• W-2 Earnings

• System of Record for Hours of Service

• Look-Back Approach

Eligibility Enrollment

Reporting/Penalties

Affordability

Closing Remarks

To visit some of the most Frequently Asked Questions and Answers ADP has received on the topic of the ACA, please visit and bookmark: www.adp.com/acafaqs

© Copyright 2011 ADP, Inc. Proprietary and Confidential Information.

Subscribe now:Stay up-to-date with ADP’s Eye on Washington regulatory

alerts. www.adp.com/healthcare

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PREPARING FOR SHARED RESPONSIBILITY Rise to the Challenge and Act Now.

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