Many business owners are still confused about health care reform and how it affects their company. FrankCrum's Human Resources Director David Peasall is an expert in the area of the Affordable Care Act. This is his webinar presentation that educates and clarifies how the new law affects employers and business owners.

2. Are You Ready for Health Care
Reform in 2014?
David Peasall, SPHR
Presenter
Director of Human Resources,
FrankCrum
#ACAFrankCrum
Cristina Lachowyn
Moderator
Digital Marketing Specialist,
FrankCrum

3. Are You Ready for Health Care
Reform in 2014?
All employers are affected by the
Affordable Care Act!
What category am I in?
Offering Health Coverage
Not Offering Health Coverage
Large Employer 100 or more
Large Employer 100 or more
Large Employer 50-99
Large Employer 50-99
Small Employer 49 or less
Small Employer 49 or less

4. Are You Ready for Health Care
Reform in 2014?
What do I need to know about the February
2014 Employer Mandate Regulations?
Is my company large or small?
Do I have to offer health coverage to my
employees?
What happens if I don’t?

5. Are You Ready for Health Care
Reform in 2014?
What is a variable hour employee? Do I have any?
What’s an Exchange Notice?
How can I help employees understand the Individual
Mandate?

6. Are You Ready for Health Care
Reform in 2014?
The Employer Mandate
It means:
Some businesses must either provide coverage - or
pay a penalty.
or

7. Is My Company Large or Small?
An applicable large employer has 50 or more full and full
time equivalent employees.
• Fulltime = 30 or more hours of service
• Fulltime Equivalent = all other ee’s
Categorize ALL your employees by hours only in this step
Important note: This includes controlled groups and
affiliated services groups.
Call your CPA or Corporate Legal Counsel if you have these.

8. What Category am I in?
Offering Health Coverage
Large Employer 100 or more (2015 category only)
•
Mandate applies in 2015
•
Count and document
•
Exchange Notice
•
90 days
•
Plan design
•
W2
•
Variable hour/seasonal employees
•
Penalty potential
•
Offer to at least 70% (95% begins in 2016)
Not Offering Health Coverage

9. What Category am I in?
Offering Health Coverage
Large Employer 100 or more (2015 category only)
•
Mandate applies in 2015
•
Count and document
•
Exchange Notice
•
90 days
•
Plan design
•
W2
•
Variable hour/seasonal employees
•
Penalty potential
•
Offer to at least 70% (95% begins in 2016)
Not Offering Health Coverage
Large Employer 100 or more (2015 category only)
•
Mandate applies in 2015
•
Count and document
•
Exchange Notice
•
Evaluate offering coverage vs. penalty cost

10. What Category am I in?
Offering Health Coverage
Large Employer 100 or more (2015 category only)
•
Mandate applies in 2015
•
Count and document
•
Exchange Notice
•
90 days
•
Plan design
•
W2
•
Variable hour/seasonal employees
•
Penalty potential
•
Offer to at least 70% (95% begins in 2016)
Large Employer 50-99 (2015 category only)
•
Mandate begins in 2016
•
Count and document
•
Exchange Notice
•
90 days
•
Plan design
•
W2
Not Offering Health Coverage
Large Employer 100 or more (2015 category only)
•
Mandate applies in 2015
•
Count and document
•
Exchange Notice
•
Evaluate offering coverage vs. penalty cost

11. What Category am I in?
Offering Health Coverage
Not Offering Health Coverage
Large Employer 100 or more (2015 category only)
•
Mandate applies in 2015
•
Count and document
•
Exchange Notice
•
90 days
•
Plan design
•
W2
•
Variable hour/seasonal employees
•
Penalty potential
•
Offer to at least 70% (95% begins in 2016)
Large Employer 100 or more (2015 category only)
•
Mandate applies in 2015
•
Count and document
•
Exchange Notice
•
Evaluate offering coverage vs. penalty cost
Large Employer 50-99 (2015 category only)
•
Mandate begins in 2016
•
Count and document
•
Exchange Notice
•
90 days
•
Plan design
•
W2
Large Employer 50-99 (2015 category only)
•
Mandate begins in 2016
•
Count and document
•
Exchange Notice
•
Evaluate coverage cost vs. penalty cost

12. What Category am I in?
Offering Health Coverage
Not Offering Health Coverage
Large Employer 100 or more (2015 category only)
•
Mandate applies in 2015
•
Count and document
•
Exchange Notice
•
90 days
•
Plan design
•
W2
•
Variable hour/seasonal employees
•
Penalty potential
•
Offer to at least 70% (95% begins in 2016)
Large Employer 100 or more (2015 category only)
•
Mandate applies in 2015
•
Count and document
•
Exchange Notice
•
Evaluate offering coverage vs. penalty cost
Large Employer 50-99 (2015 category only)
•
Mandate begins in 2016
•
Count and document
•
Exchange Notice
•
90 days
•
Plan design
•
W2
Large Employer 50-99 (2015 category only)
•
Mandate begins in 2016
•
Count and document
•
Exchange Notice
•
Evaluate coverage cost vs. penalty cost
Small Employer 49 or less
• No employer mandate
• Count and document
• Exchange Notice
• 90 days
• Plan design
• W2

13. What Category am I in?
Offering Health Coverage
Not Offering Health Coverage
Large Employer 100 or more (2015 category only)
•
Mandate applies in 2015
•
Count and document
•
Exchange Notice
•
90 days
•
Plan design
•
W2
•
Variable hour/seasonal employees
•
Penalty potential
•
Offer to at least 70% (95% begins in 2016)
Large Employer 100 or more (2015 category only)
•
Mandate applies in 2015
•
Count and document
•
Exchange Notice
•
Evaluate offering coverage vs. penalty cost
Large Employer 50-99 (2015 category only)
•
Mandate begins in 2016
•
Count and document
•
Exchange Notice
•
90 days
•
Plan design
•
W2
Large Employer 50-99 (2015 category only)
•
Mandate begins in 2016
•
Count and document
•
Exchange Notice
•
Evaluate coverage cost vs. penalty cost
Small Employer 49 or less
• No employer mandate
• Count and document
• Exchange Notice
• 90 days
• Plan design
• W2
Small Employer 49 or less
•
No employer mandate
•
Count and document
•
Exchange Notice
•
Offer coverage to attract and retain

14. Are You Ready for Health Care
Reform in 2014?
Employer Mandate is effective January 1st, unless…
Several criteria may allow an employer to have a compliance date as
of the plan renewal date (vs. January 1st) if the employer…
• Does not reduce the size of its workforce or the overall
hours of service of its employees from 2/9/14-12/31/14 to
get below 100
• Does not eliminate or materially reduce health coverage
offered as of 2/9/14
• Maintains no less than 95% of the employer contribution
amount
• Has a minimum value plan
• Does not narrow or reduce eligibility classes
• Had the plan on 12/27/2012
• Did not modify the plan renewal date to a later date
• Enrolled 25% or offered to 33%
• Certifies to the IRS in writing they meet these requirements

15. Are You Ready for Health Care
Reform in 2014?
Transition rule for determining large employer status for 2015
• May use a period of as few as six consecutive calendar
months during the 2014 calendar year
• Seasonal Worker exception applies on a calendar year basis
IRS specifically confirms that an employee’s opportunity to enroll in
PEO sponsored coverage qualifies as an offer of coverage for the
client employer to be in compliance with the Employer Mandate!

16. Is My Company Large or Small?
• ACA Company Size Calculator
• Health Care Reform Summary
• Listen to the on-demand webinar at FrankCrum.com
http://www.frankcrum.com/business-resources/affordable-care-act/

17. Is My Company Large or Small?
Let’s try going through a sample calculation:

18. Do I Have to Offer Health Coverage
to My Employees?
Everyone is affected by the Affordable Care Act!
But if you’re a large employer – there are some important requirements you
need to know about.
Large Employers Have Two Options:
#1 – Offer minimum essential coverage
OR
#2 – Pay the tax penalty
2015:
100 fulltime employees minus 80 (2015 only) = 20 X $2,000 = $40,000)
75 fulltime employees (no employer mandate in 2015 for employers 50-99)
2016:
100 fulltime employees minus 30 = 70 X $2,000 = $140,000
75 fulltime employees minus 30 = 45 X $2,000 = $90,000

19. Do I Have to Offer Health Coverage
to My Employees?
Terminology
Start
Do you have at least
50 full-time and fulltime equivalent (FTE)
employees?
Yes
Do you offer a plan
providing MEC to at
least 95% of all fulltime employees and
their dependents?
Pay or Provide Decision Chart
No
No
Penalty
100 ee’s +
70% 2015 only
No
Yes
Does the plan have
Minimum Value and is
it Affordable
Coverage?
No
Yes
Did you miss offering
coverage to up to 5 or
5% of full-time
employees?
No
No
Penalty
Yes
Is any
employee
enrolled in
an
Exchange
and
receiving a
tax credit
subsidy?
100 ee’s +
-80 2015 only
Yes
Yes
Yes
No
Annual tax penalty
$2,000 x (# of fulltime employees -30)
Monthly penalty is
1/12th of $3,000 per
month covered x (# of
full-time employees
receiving an
Exchange tax credit),
not to exceed
$2,000 x (# of fulltime minus 30).
Full-time and Full-time
Equivalent Employees –
Add the total number of
full-time employees (30
hours or more per week)
for the month, plus the
total number of hours
worked in a month by all
other employees, divided
by 120). Reduce for
Seasonal Worker
exception if applicable.
Affordable Coverage –
The paycheck cost of the
employee only tier of
coverage must not exceed
9.5% of employee’s pay.
Minimum Value Plan –
Plan that covers at least
60% of health care
expenses.
Minimum Essential
Coverage (MEC) – A plan
providing certain PPACA
required benefits.

20. Are You Ready for Health Care
Reform in 2014?
See the “Pay or Provide Calculator”
at FrankCrum.com

21. How are Health Care Plan
Requirements Changing?
1. 90 day maximum waiting period
• Based on applicability date in 2014
• Offering coverage as of “the first of the month following 90 days of
employment” is no longer allowed
2. W-2 Reporting
• Total annual premium
of the employer
sponsored health
coverage

22. How are Health Care Plan
Requirements Changing?
Plan design:
• No annual or lifetime limits
• No more pre-existing conditions
• Dependents must be covered up to age 26
• Child vision/dental must be included in the plan

23. What is a Variable Hour Employee?
What if not all of my employees work the same number of hours in a given
work week?
Do I have to offer them health care coverage?
These are called “Variable Hour Employees” – and they need to be accounted for!

24. What is a Variable Hour Employee?
Variable Hour Employer Calculator

25. What is an Exchange Notice?
All employers must provide this notice to every employee!
1.
Within 14 days of employment
2.
Must answer basic questions:
• What plans are offered?
• Number of hours required?
• What is “affordable” according to ACA?
• What is a plan’s “minimum value”?
• Who is your company’s
contact person?

26. What is an Exchange Notice?
Sample
Model
Notice

27. How Can I Help Employees
Understand the Individual Mandate?
See the “Guide to Health Care Reform for Individuals” at
FrankCrum.com

28. When Does All of This Take Effect?
2014
1. Track employee hours per calendar month to determine small or large employer status
for 2015
2. Waiting periods must be no longer than 90 days
3. File health plan information on the business tax return (voluntary)
4. Individual mandate in effect: obtain coverage or pay the tax penalty
5. Exchange Notices must be provided to all new employees within 14 days of employment
6. Watch for more regulations (such as tax filing forms 6055 and 6056 and discrimination
testing)

29. When Does All of This Take Effect?
2015
1. Employer mandate begins for employers of 100 or
more employees - provide coverage in 2015 or pay
the tax penalty in 2016
2. File health plan information on business tax return
3. Individual mandate tax increases

30. What Category am I in?
Offering Health Coverage
Not Offering Health Coverage
Large Employer 100 or more (2015 category only)
•
Mandate applies in 2015
•
Count and document
•
Exchange Notice
•
90 days
•
Plan design
•
W2
•
Variable hour/seasonal employees
•
Penalty potential
•
Offer to at least 70% (95% begins in 2016)
Large Employer 100 or more (2015 category only)
•
Mandate applies in 2015
•
Count and document
•
Exchange Notice
•
Evaluate offering coverage vs. penalty cost
Large Employer 50-99 (2015 category only)
•
Mandate begins in 2016
•
Count and document
•
Exchange Notice
•
90 days
•
Plan design
•
W2
Large Employer 50-99 (2015 category only)
•
Mandate begins in 2016
•
Count and document
•
Exchange Notice
•
Evaluate coverage cost vs. penalty cost
Small Employer 49 or less
• No employer mandate
• Count and document
• Exchange Notice
• 90 days
• Plan design
• W2
Small Employer 49 or less
•
No employer mandate
•
Count and document
•
Exchange Notice
•
Offer coverage to attract and retain

31. Are You Ready for Health Care
Reform in 2014?
Need Help?
Legal Notice – The purpose of this information is to assist in the discussion of risk, concerns and general requirements. It
is not legal counsel, tax advice or judgment of a business’s compliance or non-compliance. It is recommended that you
seek qualified tax and legal counsel familiar with your particular circumstances before taking any action.