PPACA update

Kelley Baker

Karen Haase

kbaker@hslegalfirm.com

khaase@hslegalfirm.com @KarenHaase

Steve Williams

Bobby Truhe

swilliams@hslegalfirm.com @SteveisEsteban

btruhe@hslegalfirm.com @btruhe

EHA PPACA UPDATE: A TIMELINE FOR COMPLIANCE In February, the IRS released the final regulations regarding the "large employer" mandate and rules for transition relief under the Patient Protection and Affordable Care Act (“PPACA�). These regulations included new rules for counting hours of service which could significantly impact each school district. The regulations are of vital and immediate importance because they will determine which employers will be able to defer implementing Obamacare until 2016 as opposed to complying with the employer mandate sooner.

When the regulations were initially released, school districts focused on determining which type of transition relief would qualify their district to defer implementation of the employer mandate. This article will briefly review the different types of transition relief and then will move on to outline a timeline that schools may use for planning their next steps in preparing to comply with the employer mandate by September 1, 2016.

Brief Recap of Transition Relief For purposes of transition relief, employers will be divided into 3 categories based on their "large employer" number: 0-49, 50-99, and 100+. It is important to note that the new "large employer" counting rules will impact your large employer number. If you previously calculated your "large employer" number before the new regulations were released in February, you should do so again.

Employers with a 0-49 "large employer" number will not be required to comply with the employer mandates of PPACA, because they will not be deemed a "large employer."

Employers with a 50-99 "large employer" number will have transition relief until September 1, 2016, assuming they meet the requirements of this transition relief.

Employers with a "large employer" number of 100 or more will have transition relief until September 1, 2016, so long as the employer offers "affordable" insurance to at least 70% of its full-time employees.

There are additional forms of transition relief. If you do not qualify for the transition relief discussed above, or if you are uncertain about how to make these calculations, you should contact your school attorney.

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Implementation Timeline The remainder of this article assumes that your school district receives transition relief through September 1, 2016. As with all things PPACA, this is a general timeline.

You should consider these issues as they apply uniquely to your district.

NOW: Track hours! For both the "large employer" and individual employee eligibility calculations, your district will need accurate “hours of service.”

Spring 2015: Certify 2014 "large employer" number to the IRS. The "large employer" number for 2014 will represent hours of service during the 2014 calendar year, from January 1, 2014 through December 31, 2014, and it will determine the type of transition relief available to your district. Employers will make this calculation every year, so track hours!

June 1, 2015: Begin "lookback period" for individual employee "full-time" determinations. This data will be used to determine which employees qualify as "fulltime" for purposes of offering insurance under Obamacare, when the employer mandate goes into effect on September 1, 2016.

Fall 2015: EHA will release premium rates applicable for the 2016-2017 year, which will be the rates in effect for the September 1, 2016 date, which coincides with the end of transition relief and beginning of the large employer mandate.

January-May, 2016: Establish new subgroups for new groups of employees who will receive "offers" of insurance under the PPACA mandate. During this time, your board will likely make determinations as to which insurance offerings will be given to employees in new subgroups.

May 31, 2016: End of the "lookback period" for the data used to determine fulltime status for district employees.

June 1, 2016—September 1, 2016: This is the "administrative period," during which you analyze the "lookback period" data to determine which employees are "fulltime" under PPACA. "Full-time" employees are those who work at least 30 hours per week (or 130 per month) during their weeks of employment.

After analyzing the data, your district will make any new "offers" of insurance as decided by the board. Offers may be made earlier, but they should be made no later than early in the month of June to permit new employees to submit enrollment applications to EHA by July 1, 2016.

September 1, 2016: This date represents the beginning of coverage for new enrollees; the end of transition relief; and the first month in which your district could be

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assessed the shared responsibility tax for failing to offer "affordable, minimum value" coverage to full-time employees.

Conclusion If your district has not evaluated your position after the final regulations, you should do that immediately. Once you have determined your eligibility for transition relief, your district can set out making sure you track hours accurately and have good data to use each step of the way.

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