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Overview of Tribes and Tribal Entities as Employers under the Patient Protection and Affordable Care Act

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Title: Overview of Tribes and Tribal Entities as Employers under the Patient Protection and Affordable Care Act


1
  • Overview of Tribes and Tribal Entities as
    Employers under the Patient Protection and
    Affordable Care Act

2
This Training
  • Four sections to this training
  • Overview of Tribes and Tribal Entities as
    Employers under the ACA
  • Small Business Health Options Program (SHOP)
  • Small Business Tax Credit (Tax Credit)
  • Employer Shared Responsibility

3
Overview of Tribes and Tribal Entities as
Employers Topics
  • The Patient Protection and Affordable Care Act
    (ACA)
  • ACA Employer Provisions
  • Importance to Tribes and Tribal Entities
  • Small Businesses v. Large Businesses
  • Introduction to Counting Employees
  • Introduction to Determining Full-Time Employees

4
  • The Patient Protection and Affordable Care Act
    (ACA)

5
The Affordable Care Act
  • On March 23, 2010, President Obama signed into
    law the Patient Protection and Affordable Care
    Act (ACA).
  • The ACA protects the right of all Americans,
    including American Indians and Alaska Natives, to
    access affordable health care.
  • More than 32 million in this country who would
    otherwise not have health insurance will have
    access to health coverage.

6
The Affordable Care Act
  • There are several strategies under the ACA to
    ensure that everyone has access to the affordable
    health care by January 1, 2014
  • Medicaid Expansion
  • Health care tax credits for individuals and small
    businesses
  • Insurance Marketplaces in each state
  • Major insurance reform
  • No annual or lifetime limits allowed
  • A person cannot be denied coverage for a
    pre-existing condition

7
  • ACA Employer Provisions

8
ACA Employer Provisions
  • Provisions related to employers began to take
    effect in 2010 while other provisions will be
    phased in through 2018.
  • Regulations issued by
  • Department of Health and Human Services (HHS)
  • Centers for Medicare Medicaid Services (CMS)
  • Department of Labor (DOL)
  • Department of Treasury, Internal Revenue Service
    (IRS)
  • U.S. Office of Personnel Management (OPM)
  • Regulations will continue to be issued through
    2014.

9
ACA Employer Provisions At-A-Glance
ACA Provisions Number of employees Number of employees Number of employees Number of employees Number of employees
ACA Provisions 1 to 24 25 to 49 50 to 100 101-200 gt 200
Small Business Health Care Tax Credit X
Small Business Health Options Program (SHOP) X X X (may be limited to 50)
IRS Assessable Payments X X X
Automatic enrollment of full-time employees in employer health plan X
10
  • Importance to Tribes and
  • Tribal Entities

11
Why is this Important for Tribes and Tribal
Entities?
  • If a Tribe is considered a large employer, it
    may incur an assessable payment for not providing
    insurance.
  • Tribes may be eligible to purchase health
    insurance through the Small Business Health
    Options Program (SHOP).
  • Tribes can strategize to meet ACA employer
    requirements in a cost effective manner.

12
Importance for Tribes and Tribal Entities
  • Exemption from some plan rules for employers
    with
  • 1. Self-funded plans
  • 2. Large group market plans, and
  • 3. Grandfathered plans
  • Large tribal employers will likely have one of
    these exempt plans.

13
Provisions Apply to Tribes and Tribal Entities as
Employers
  • Small Business Health Care Tax Credit
  • Qualify if 1 to 24 full-time equivalent
    employees.
  • Per IRS Guidance, an agency or instrumentality of
    an Indian tribal government is not eligible for
    the tax credits unless it is a 501(c)(3).
  • Other Tribally owned entities may be eligible for
    the tax credits (e.g., an entity organized under
    State law).

14
Provisions Apply to Tribes and Tribal Entities
(continued)
  • Small Business Health Options Program (SHOP)
  • Qualify if up to 100 employees (may be limited
    to 50 employees depending on State).
  • Tribes and Tribal entities may be eligible to
    purchase insurance for full-time employees
    through the SHOP.

15
Provisions Apply to Tribes and Tribal Entities
(continued)
  • Employer Shared Responsibility provisions (i.e.,
    assessable payments)
  • Applicable to employers with gt 50 full-time
    employees.
  • Tribal governments and subdivisions of Tribal
    governments are subject to the Employer Shared
    Responsibility provisions.
  • Other Tribal entities are also subject to these
    provisions.
  • Delayed until 2015.

16
Provisions Apply to Tribes and Tribal Entities
(continued)
  • Fair Labor Standards Act (FLSA), 18A- Requires
    automatic enrollment of full-time employees in
    employers health plan
  • Applicable to employers with gt 201 employees.
  • Federal courts are divided as to the application
    of FLSA to Tribal employers.
  • Compliance not required until regulations are
    issued.

17
  • Small Businesses v. Large Businesses

18
Small Businesses v. Large Businesses Summary
  Small Business Large Business
Tax Credits for premiums paid for employee health insurance Yes No
Assessable Payments (taxes) for not providing affordable health coverage No Yes
Can purchase insurance on SHOP Yes No
Health plans offered must have Essential Health Benefits (EHB) Yes Yes for new plans. Exempt large group plans, grandfathered, self-insured
19
Small Businesses v. Large Businesses Summary
(continued)
  Small Business Large Business
Health plans offered must cover dependents (not spouse) No Yes
Employer must pay portion of premiums for dependents No No
Health plan offered must cover spouse No No
20
  • Introduction to Counting Employees

21
Counting Employees
  • Different methods are used to count employees for
    different provisions of the ACA, including
  • Small Business Tax Credit
  • SHOP
  • State-based (state specific)
  • Federally-facilitated (same as Employer Shared
    Responsibility)
  • Employer Shared Responsibility

22
Counting Employees (continued)
Employer Provisions Description of Method
Small Business Tax Credit (1 to 24 full-time equivalent employees) Count full-time and part-time employees to determine number of full-time equivalent employees. A specific method is required different than method for FF-SHOP and Employer Shared Responsibility.
SHOP ( 100 employees or 50 employees per State election 50 employees in FF) For State-based SHOP Follow State method for counting employees. For FF-SHOP Count number of full-time employees and full-time equivalent employees (part-time employees). Same method as Employer Shared Responsibility.
Employer Shared Responsibility ( 50 full-time employees) Count number of full-time employees and full-time equivalent employees (part-time employees).
23
  • Introduction to Determining Full-Time Employees

24
Determining Full-Time Employees
  • Federal definition of full-time employee used to
    identify full-time employees for
  • FF-SHOP eligibility (possibly, State SHOP)
  • Small Business Tax Credit eligibility
  • Shared Employer Responsibility provisions
    applicability
  • Large Employer Status
  • Insurance coverage requirement
  • Assessable payments

25
Determining Full-Time Employees (continued)
  • Full-Time Employee An employee who is employed
    an average of 30 hours of service per week or 130
    hours of service per month.

26
Full-Time Employees Determining Hours of Service
  • Hours of Service includes each hour an employee
    is paid or entitled to payment
  • For performance of duties for the employer or
  • For a period of time during which no duties are
    performed due to vacation, holiday, illness,
    incapacity including disability, layoff, jury
    duty, military duty or leave of absence.
  • Applies to FF-SHOP, Small Business Tax Credit,
    and Employer Shared Responsibility provisions,
    but not to State-based SHOP until 2016.

27
Full-Time Employees Determining Hours of
Service (continued)
  • For Hourly Employees
  • Calculate the actual hours of service by the
    employee.
  • For Non-Hourly Employees
  • Calculate the actual hours of service by the
    employee.
  • Days-worked equivalency Credit the employee
    with 8 hours of service for each day the employee
    would be credited with at least 1 hour of
    service.
  • Weeks-worked equivalency Credit the employee
    with 40 hours of service for each week.

28
Full-Time Employees Determining Hours of
Service (continued)
  • Rules as to Use of Equivalencies
  • Prohibited use of equivalencies Cannot be used
    to substantially understate an employees hours
    of service.
  • Different classifications of non-hourly
    employees Different equivalencies may be used
    for different classifications of non-hourly
    employees provided that the classifications are
    reasonable and consistently applied.
  • Calendar Year Changes An employer may also
    change the method for calculating non-hourly
    employee each calendar year. For example, for all
    non-hourly employees, an employer may use the
    actual hours worked in 2014, but may use the
    days-worked equivalency method for counting hours
    of service in 2015.

29
Example Hourly Employee Hours of Service
  • Susan is a hostess at the Tribal Casino Buffet,
    an hourly position.
  • HR records reflect that in February she worked an
    average of 35 hours of service per week (or an
    average of 140 hours of service per month).
  • Susan is considered a full-time employee for the
    month of February.

30
Example Application of Equivalencies on
Non-Hourly Employee Hours of Service
  • Mike is a Cage Manager at the Tribal Casino, a
    non-hourly position.
  • Note This example shows why the Days-worked
    equivalency cannot be used for Mike. An employer
    is not required to use all three methods.

Methods Hours of Service Full-time?
Actual Mike worked 10 hour days, 3 days a week in February (30 hours of service per week). Yes.
Days-worked equivalency This equivalency cannot be used for Mike because if he worked 3 days a week, the days worked equivalency would result in Mike working 24 hours of service per week. No. However, this equivalency is prohibited because it would underestimate Mikes hours of service.
Weeks-worked Equivalency This equivalency can be used for Mike. Using this equivalency, Mike is credited with 40 hours of service in a week. Yes.
31
Section Review
  • Explain why the employer provisions are important
    to Tribes.
  • Name one strategy under the ACA to get people
    insured.
  • Name one of the employer requirements under the
    ACA.
  • Describe one provision that is different for a
    small business compared to a large business.
  • Define full-time employee

32
  • Questions
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