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ACA planning

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The Affordable Care Act (ACA)Provisions that affect UM:Employers with more than 50 employees are subject to the ACA regulations, one of which is tracking employee hours and making sure that all employees working an average of 30 hours or more per week are offered coverage;Insurance may not include exclusions in regard to pre-existing conditions; must provide cost free preventative care; can have no lifetime maximums;Our plan must pay a fee covered for the Patient Centered Outcomes Trust which will be about $2 per each person covered under our plan;It has been determined that the Montana University System isTHEsingle employer for purposes of the ACA and our health insurance plan – this means that we will need to track employees across all of the system in regard to employment and hours worked in order to maintain compliance;The employer must provide all new hires with a cover letter and Part A of the ACA documentation within 14 days of hire;We must report the value of health insurance – according to the parameters of the ACA – on employee W2s.
With the advent of ACA there are nowTWOlaws which govern health insurance coverage for the University of Montana:Montana Code Annotated–Employees who are employed at a minimum .5 FTE for 6 months or greater are eligible for health insurance. This is the rule that has governed our health insurance and will continue to be in effect.Affordable Care Act–Eligibility is determined by the average hours worked rule – any employee who works an average of 30 hours or more per week is eligible for health insurance and must be offered employer health insurance. This regulation will impact the hiring of students and temporary employees significantly.
Employersthat are subject to theemployer shared responsibility provisions (or you may have heard the term “pay-or-play provisions”)and fail to offer their full-time employees minimum essential coverage that is(1) affordableand(2) providesminimum value may be subject to penalties if a full-time employee purchases coverage on an Exchange and qualifies for a premium subsidy.Therefore, it is important for those employers that will offer coverage to be able to identify their full-timeemployees. Afull-time employee for this purpose is an employee who is employed on average at least 30 hours per week. A monthly equivalent of 130 hours may beused.UM has employeeswith variable-hourschedules, and theACA provides the option to use a system of measurement and stability periods todetermine whichemployees qualify as full time.  The employee’s status as full time or part time, based on the“measurement period”,governs the employee’s status for the subsequent“stability period”,even if the employee’s hours change during the stability period.
If you are hiring a student or temporary employee who hasnot, under our current practice,been eligible for UM employer health insurance coverage you need to be aware of several points:Determining whether an employee is eligible for employer health insurance coverage under the ACA hinges on whether that employee works an average of 30 hours per work or more.Hoursof service include hours worked, and hours for which an employee is paid but does not work, such as vacation, holiday, illness or disability, jury duty, military duty, orpaid leaveofabsence.This “average” determination is made based on the hours that are worked by the employee duringwhat is called the“measurement period”.The measurement period for the Montana University System (MUS) will be a six monthperiod and our first measurement period will begin January 1, 2014.An employee’s hourswill beanalyzed at the end of the 6 month measurement period to determine whether they have met theaverage 30hour per week requirement.If the employee meets theaverage 30hour per week requirement thenthe employeemust be offered employer healthinsurance. The employee may waive the health insurance, however, the employing department will still be charged for the employer share (currently $806/month).
Determination ofEligibility:Human Resource Services will monitor the records of employees to determine whether the average of 30 hours per week has occurred.Total hours worked by employees, for instance student employees or temporary employees, for the measurement period (January 1, 2014 to June 30, 2014) will be calculated and divided by 6 months.If the employee has worked 130 hours per month or more than they will be eligible for inclusion in the health insurance plan.If it is determined that the employee is eligible for insurance then the employee will remain eligible for the full “stability period”.
StabilityPeriod:The stability period is the period of time for which the employee is eligible for health insurance.The stability period must be as long at the measurement period at a minimum – therefore the stability period for UM will be 6 months, same as the measurement period.If the employee proves to have worked at least an average of 30 hours per week in the measurement period then in the following 6 month period the employee is eligible for health insurance as long as they remain employed.This health insurance eligibility during the stability period remains true whether the employee actually works an average of 30 hours per week during the stability period or not.

Scenario:Terri is hired Jan 1, 2014 as a temporary employee for 5 months. This hiring status makes her ineligible for health insurance coverage under our current rules.During that 5 month period she works 40 hours per week with some over time also – she is calculated as eligible for health insurance during the measurement period.Her department determines that they need to keep her for another 4 months, but only at 10 hours per week, and submit paperwork for this extension.Terri must be offered health insurance for the four month period of time regardless of the number of hours she will work each week during that time due to the provisions of ACA.
Break inServiceRules:Under our current set of requirements a temporary employee can only be hired for one year at a time at the most and must then have at least a 5 day break in service before being employed in another temporary position. This break in service, under out current system, would bring that employee back as a new hire for all matters including health insurance eligibility.Under the ACA there are three distinct rules that apply to break in service for the purposes of health insurance eligibility:1. Four (4) week break in service – if an employee has a four week break in service then this is treated as continuous employment for purposes of health insurance eligibility only.Example: a temporary employee is hired to work fall semester and then has 4 weeks off over winter break returning to campus to work for the spring – this is considered continuous employment.
Break inServiceRules:2.A 26week break in service – this is the golden rule. If an employee works for UM, leaves employment, and returns to work for UM 26 weeks or more later than that is a clear cut case of new employment and all considerations about health insurance under the rule of ACA start over again.3.A 4to 26 week break in service – in this timeframe whether there is a break in service according to the ACA depends on the number of weeks workedversusthe number of weeks out of work.Example: Anemployee is hired January 1, 2014 to work spring semester and continues this position through June 30, 2014. This is 26 weeks of work. The individual does not work July and August and returns to UM on Sept. 1st. This is 8 weeks not employed and this would be treated as continuous employment.
Student employees and temporary employees are both subject to the regulations of the ACA.Ifthey meet the 30 hour average per week criterion during a measurement period then they must be offered employer health insurance for their stability period. (An employee must be actively employed during their stability period to be eligible for and receive the benefits of the employer health insurance).Ifthe employee waives the employer healthinsurance,the campus department will still be responsible for the employer health insurance contribution on that employee – currently $806 permonth.(This does not give the student employee health insurance coverage, but under our plan the employer contribution must be paid even if the employee waives coverage).Ifa student employee in a student position becomes subject to the requirements of the ACA that employee will bemoved toa temporaryposition. This is required by federal law that limits student employees to work that is not benefits eligible. Thiswill cause that student tobecomesubject to FICA, Medicare and Unemployment taxes and all other requirements of a temporary classified position – such as union affiliation, requirement for a written role description, and a maximum of one year of employment in the temporaryposition.

Adjuncts and the ACAImpact:Adjuncts are employed by UM to teach a certain number of classes each semester. They are assigned an FTE based on their credit load. A full time credit load at UM is 15 credits. A .5 FTE is 7.5 credits. The Montana University System has determined that we will consider an 11.25 credit load as equivalent to 30 hours of work per week. In order to track and apply the regulations of the ACA accurately Human Resource Services will analyze the credit load of adjuncts each measurement period in order to determine their eligibility for health insurance coverage.If the adjunct meets the regular rules of the Montana Code then they will be covered for health insurance as normal procedure.Graduate studentsare also subject to the regulations of the ACA, must be managed accurately for the number of hours worked each week, and must be held to no more than 29 hours per week on average fortheemployment portion of their graduate contract.
FTE andSalariedEmployees:Many employees of the UM campus are considered salaried employees and are recorded in the system with an appropriate FTE. If the FTE is less than .5FTE,then the employee has not been eligible for health insurance coverage. We do not keep track of actual hours worked for these individuals in the central payroll system.If, however, these individuals are routinely working 20 hours or more per week for 6 months or more then they should be covered for health insurance according to the MCA. If they happen to work 30 hours or more per week then they could be eligible for health insurance coverage under the ACA.We should notarbitrarily set the FTE at less than .5 FTE in order to avoid the cost of health insurance. And under the ACA you willneedto be diligent about reporting the FTE of salaried employees (like Letter of appointment and Contract Professionals) accurately.
Tracking Student HoursAcrossdepartments:Human Resource Services will be responsible for tracking student hours across campus and notifying departments when a student is working in excess of the average hours allowed. HRS will notify all departments of a student who works in multiple departments. It is up to the employing department(s) to work with the students and keep the hours under the 30 hours per weekthreshold.Campus departments will be notified whenever they have a student who is working over the average number of hours – 30 – as identified by the regulations of the ACA. All hours are recorded in the system and reports will be analyzed after each payroll is completed.International employees are treated exactly the same as any other in regard to the ACA or MCA for health insurance coverage.





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ACA planning