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Affordable Care Act Information from MASWM

The MASWM Executive Committee felt that it was important to share information on the Affordable Care Act.

Dee Froneyberger, treasurer; Bob Engemann, secretary; and Area III Director Brent Blackwell composed the following information in late December. Unfortunately, there are still more questions than concrete answers, and we will have to wait and see how the ACA will ultimately affect the workshops and our employees. One attorney noted, “…an employer is generally free to provide a questionnaire requesting that employees voluntarily disclose the source of their health coverage.”

The Kaiser Foundation (www.kff.org) has an information site that may be of help (www.kff.org/healthreform/upload/8275.pdf).

Below is some general information, but each workshop has different scenarios so the best plan of action is to check with your legal and healthcare experts.

Affordable Care Act

I know many of you have already put into place policies and programs to avoid the impact of the Affordable Care Act (ACA), but I wanted to update anyone who is interested on what we have researched to this point in time.

The ACA will be implemented and administered by not one, but three, government agencies: Department of Labor, Department of Treasury (IRS) and the Department of Health and Human Services. This means that all three entities would be involved with any changes or existing definitions of the ACA. For those of you familiar with governmental departments, my experience is that it is hard enough to get a straight answer from one, much less three different departments.

There is still some question as to if our developmentally disabled workers are exempt from the ACA. That could mean we would be responsible for those on Medicaid and would be responsible for providing insurance for those who are not on Medicaid or some type of health plan effective 2014. Although many terms are used for our workers (consumers, clients, etc.), as far as the IRS is concerned, anyone receiving a W-2 is considered an employee regardless of a disability. All hours worked, paid vacations and paid holidays will all be included in the total number of hours for each employee to determine if he or she is considered full or part-time.

Full time is considered 30 hours or more per week, and part-time is less than 30 hours per week. Full time equivalents (FTE’s) are based on 1,560 hours per year, 130 hours per month and 30 hours per week. Part-time equivalents are based on 1,440 hours per year, 120 hours per month and 27.69 hours per week.

EXAMPLE: You have 10 full time staff working 40 hours per week.

Monthly: 10 x 173.333 = 1,733.333 hours per month / 130 = 13.333 Total Annual FTE’s

EXAMPLE: You have 3 part time staff working 100 hours each per month.

Monthly: 3 x 100 = 300 hours per month / 120 = 2.5 Total Annual FTE’s

EXAMPLE: You have 65 disabled workers working 115 hours each per month.

Monthly: 65 x 115 = 7,475 hours per month / 120 = 62.3 FTE’s

Bottom Line – 13.3 + 2.5 + 62.3 = 78.1 total annual FTE’s, which means you are over the 50 employee equivalent and must adhere to all the regulations for companies of that size.

REMEMBER: Even though a staff or employee works, for example, 28 hours per week, if they fill in for someone sick, on vacation or work overtime, they could go over the annual limit, and you would then be responsible to provide health insurance in 2014.

EXAMPLE: One part-time staff works 28 hours per week. 28 x 52 = 1,456 annually, so if they work 1,560 (30 x 52) or more or an additional 104 hours or more in that calendar year they will be considered full time and eligible for health insurance.

The planning year will be 2013, and that is where all the numbers will come from to put the ACA in place in 2014. We will be required to keep accurate tracking and documentation in place in 2013 to prove who is and who is not eligible to be on our insurance roles starting 2014. The change can be made effective 1-1-2013 and still avoid the penalty for changing hours to avoid the ACA. However if the change is made in 2013, the penalty will be enforced. That is why you are hearing in the news that Papa John’s and others are making the changes now, rather than in 2013.

The information above deals basically with hourly workers, but there is a requirement and process to calculate the exempt or salaried staff called an “Administrative Period” (IRS 2012-58) that will need to be done in 2013 as well. Those shops using contractors for bus drivers, janitorial, maintenance, etc. who work exclusively for the shop will probably be considered employees by the IRS. Will the Medicaid covered employees be exempt, and if so, how will they need to be waivered from the employer’s healthcare plans? There are two important requirements: 1) the plan you offer must be affordable and 2) the plan must provide minimal essential coverage.

From what we can determine, there are still a lot of unanswered questions, and you should contact your legal advisors and healthcare providers to determine your best plan of action.

Once again, I know many of you have already put changes in place, and I am sure know more than we have been able to compile, but we thought it was important to get as much information out to the membership as possible to make a reasonably educated decision on how the ACA will affect our organizations and the people we serve.