Implications of the Affordable Care Act for Employers

Bob Kocher, M.D.

A P R E S E N T A T I O N B Y

Why Am I (Bob) Here?S E C T I O N 1

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Healthcare Consulting

Doctor at Harvard

Healthcare Reform

F R O M

Partner at Venrock

T O

T O

T O

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T H E P R O B L E M

spent on healthcare and nobody is happy with the

results

$3.1 trillion

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T H E S O LU T I O N

The Affordable Care ActKey provisions are intended to extend coverage to millions of uninsured Americans, to implement measures that will lower health care costs and improve system efficiency, and to eliminate industry practices that include cancellation and denial of coverage due to pre-existing conditions.

Key ACA Takeaways for Employers

S E C T I O N 2

Goals of the ACAR E D U C E C O S T S

E X PA N D C O V E RA G E I N C R E A S E Q U A L I T Y

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G OA L 1 : R E D U C E H E A LT H C A R E C O S T S

Commercial healthcare premiums lowest in 50 years

Last 5 years of healthcare costs = slowest growth ever (in the history of Medicare)

A C C O M P L I S H M E N T S

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G OA L 2 : E X PA N D I N S U RA N C E C OV E RAG E

America has the lowest rate of uninsured in all time

Waiting times for patients have NOT changed at all

A C C O M P L I S H M E N T S

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G OA L 3 : I N C R E A S E Q U A L I T Y C A R E

700,000 less patients readmitted to hospitals within 30 days

17% drop in hospital-acquired infections since 2010

A C C O M P L I S H M E N T S

The ACA and YouT H E W H O , W H AT , W H E N , A N D W H Y ?

WHOT H E

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T H E W H O

Companies with 100+ full-time employees

Companies with 50-99 full-time employees(but you may qualify for transition relief)

The ACA considers you an Applicable Large Employer (ALE) if your company has 50+ full-time employees and full-time equivalent employees (FT/FTE). Compliance with the ACA employer mandate in 2015 is based on the size of your company in 2014. Affiliated employers may be treated as one employer in determining ALE status.

WHO needs to comply with the ACA?

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T H E W H O

Calculating your full-time employees

40 Full Time Employees (30 hours/wk)

+20 Part-Time Employees (15

hours/wk)50 FTEs

Note: Rules are even more complicated for seasonal workers.

E X A M P L E

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T H E W H O

Limited Workforce Size. An employer must employ on average between 50-99 FT employees (including FTEs) on business days during 2014.

Maintenance of Workforce and Aggregate Hours of Service. From February 9th, 2014 to December 31st, 2014, an employer may not reduce the size of its workforce or its employees’ hours of service purely to qualify for the transition relief.

Maintenance of Previously Offered Health Coverage. An employer must maintain—and not materially reduce—the health coverage offered as of February 9th, 2014, until the last day of the 2015 plan year.

Qualifying for Transition Relief

T H E

WHAT

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T H E W H AT

WHAT is Employer Shared Responsibility?

To be compliant, the ACA requires businesses to offer affordable insurance that provides

minimum value:Affordable Insurance: < 9.5% of an employee’s annual household income

Minimum Value: 60% of the total cost of an employee’s medical expenses

Minimum Essential Coverage: the minimum essential health benefits that plans are required to coverAnd to track and report employee data

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T H E W H AT

Using the 3 Safe Harbors

Is your health insurance affordable? Make sure your lowest cost, self-only employee plan does not

exceed 9.5% of:

Employee’s W2 Wages

S A F E H A R B O R # 1 S A F E H A R B O R # 2

Employee’s Hourly Pay Rate

S A F E H A R B O R # 3

The Federal Poverty Level for

an Individual

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T H E W H AT

Tracking Employee Data

HR Payroll Benefits Time & Attendance

Date of birth Hours work and paidProof of offering health insurance

Leave of Absence dates

Date of hire/termination Hourly rate of payMinimum value documentation

State-mandated leaves

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T H E W H AT

Form 1094-CEmployer TransmittalAccounts for each of the following, per 2015 calendar month:

Full-time employees

Total headcount

Whether Minimum Essential Coverage was offered

Whether an applicable 4980H “Safe Harbor” was used

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T H E W H AT

Form 1095-CEmployee StatementAccounts for each of the following, per 2015 calendar month:

Proof of offer of coverage (with code)

Employee’s share of the lowest cost monthly premium

Whether an applicable 4980H “Safe Harbor” was used

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T H E W H AT

Written Statement to Each Covered Employee

The employer’s name, address, and contact information

The information for the employee on the return being filed

T H E

WHEN

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T H E W H E N

WHEN do you need to file the forms?

February 29, 2016

P A P E R D E A D L I N E

March 31, 2016

D I G I T A L D E A D L I N E

Form 1094-C & Form 1095-C

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T H E W H E N

WHEN do you need to file the statement?

A written statement for each covered employee

January 31, 2016

D E A D L I N E

T H E

WHY

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T H E W H Y

The penalties are already in effect for the 2015 plan year for companies with 100+ FT/FTE. For companies with 50-99 employees, penalties are effective for the plan year beginning on January

1st, 2016.

WHY comply with the ACA?

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T H E W H Y

Avoid Penalties

Do This… …or Pay This Penalty

Offer your employees health coverage$2,000 for every FT employee at your company(less the first 30)

Offer affordable health coverage (an employee’s contribution doesn’t exceed 9.5% of their household income) that provides minimum value (the plan covers, on average, 60% of an employee’s medical expenses)

$3,000 for every FT employee at your company(less the first 30)

File forms 1094-C and 1095-C $200 for each delinquent or incorrect return

Provide written information statements to each of your employees

$200 for each missing statement

The Future of HRS E C T I O N 3

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T H E F U T U R E O F H E A LT H C A R E

All other sectors have benefited from information technology and data liberation. There will be MORE

changes in the next decade.

It’s healthcare’s turn.

M O R E

ReliableM O R E

AffordableM O R E

TechnologyM O R E

Rewarding

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T H E F U T U R E O F H R

The new human resources is connected and integrated. No more separate, siloed systems.

BenefitsPayrollHR Time & Attendance

Your all-in-one ACA coverage and compliance solution

Q&A

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T H E H O W

Companies who show “good faith efforts to comply with the ACA reporting requirements” are eligible for short-term relief

from penalties.

HOW to show good faith

Document your offers of health coverage

Track your employees’ time and attendance

Keep accurate payroll and pay rate records

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T H E H O W

HOW Zenefits can help you prove good

faith

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T H E H O W

We cover your employees with choices of carriers and affordable plans.

We provide each employee with documented proof of coverage offered.

Document health coverageZ E N E F I T S H E L P S

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T H E H O W

We automatically offer employees health coverage when they surpass the ACA threshold.

We automatically un-enroll employees (and administer COBRA) when they drop below the threshold.

We alert you to compliance risks before they become penalties.

Track time & attendanceZ E N E F I T S H E L P S

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T H E H O W

We track your employees’ paid and unpaid hours and leaves of absences.

We generate your 1094-C and 1095-C forms and eliminate manual errors.

Keep accurate payroll & pay rate records

Z E N E F I T S H E L P S

Cheers!P L E A S E J O I N U S O N T H E T E R R A C E F O R D R I N K S +

S N A C K S