Affordable Care Act (ACA)

The Affordable Care Act (ACA), or Health Care Reform law, is federal legislation passed in 2010.

ACA Impact

This law is complex, multi-faceted and has an impact on both employers and employees.

Employer Impact

The new law requires that employers with 50 or more full-time employees offer medical insurance to full-time employees and their children up to age 26. Employers not offering medical insurance may have to pay a penalty to the government. The University of North Dakota already offers medical insurance to benefit-eligible employees.

The Affordable Care Act has many requirements with various implementation dates, but most of the requirements are effective January 2015. As an employer, the University of North Dakota has significant responsibilities under the law. In compliance with the ACA, the University of North Dakota offers medical coverage to eligible employees.

Employee Impact

The law requires that most Americans have medical insurance by January 1, 2015. The law ensures that Americans have access to medical insurance they can afford—whether they get it from an employer, an insurance company or from the government. Individuals that do not have medical insurance may have to pay a tax penalty.

ACA Resources

ACA Periods

Standard Measurement Period

The time period of between 3 and 12 consecutive months where employer tracks on-going employees’ hours of service and determines if employees works an average of 30 hours per week and are considered full-time. (Employer also uses “Initial Measurement Period” for new employees).

Administrative Period

Optional time period between Measurement and Stability periods to calculate full-time status, communicate status to employee and conduct open enrollment. (The combined length of Initial Measurement Period + Administrative period for New Employees, determined to be full-time, cannot exceed the first of the month following new employee’s one-year anniversary from hire date.)

Stability Period

Time period of not less than 6 months that employees determined to be full-time during the Standard measurement period are offered full-time coverage. Stability period can correspond to the plan year or to another time period as defined by employer.

ACA Employee Definitions

Full-Time Employee

Position is defined as full-time with the expectation that employee will work an average of 30 or more hours per week.

Variable Hour Employee

Employer cannot determine if position is “reasonably expected” to average 30 or more hours per week and can utilize a safe harbor look-back measurement period to determine if employee is full-time.

Seasonal Employee

Position occurs during the same season each year and is 6 months or less in duration (Final Regulations). Positions determined to be seasonal can be subject to a look-back measurement period if applicable.

Part-Time Employee

Position is defined as not full-time with the expectation that employee will always work less than 30 hours per week and is not a variable hour or seasonal employee.

Temporary Staffing

A person employed through a temporary staffing service is an employee of the staffing service as long as the staffing service fulfills the common-law definition of the employer, including controlling the details of how services are performed, providing compensation and benefits, and acting as the employer for payroll tax purposes.

ACA Questions

If an employee meets the federal full-time employee (FTE) definition, do you offer them coverage and then tell them what their premium contribution will be?

Yes, once you determine an employee meets the ACA definition of FTE, you will need to offer them coverage effective the first of the month following date of hire. You should also visit with them regarding the affordability of coverage, and what their premium requirement would be if they elect coverage.

If a person has 3 types of jobs that they are performing with the same employer, do you evaluate each job separately for determining eligibility?

ACA would have you sum the hours within the same employer to determine if the individual meets ACA FTE definition and should be offered coverage.

If you have an employee out on FMLA and you hire a temporary employee, do you need to offer the temporary employee coverage?

If the employee is reasonably expected to work at least 30 hours per week/130 hours in a month, then you would want to offer them coverage effective 1st of month following hire. If you cannot determine this, then you would need to do an initial measurement period and determine at the end of this period. If eligible, you would offer coverage during the stability period. If not, no coverage offer is needed.

If you have a variable hour employee who after the initial measurement period is determined to be eligible during the stability period, but they are then not eligible during the next measurement period, you no longer offer them coverage.

If the variable hour employee is determined eligible during the measurement period, they remain eligible during the following stability period, regardless of how many hours they work during the stability period. If they do not qualify when looking at the next measurement period, you no longer offer them coverage after December 31.

If an employee is seasonal (below 6 months), is it necessary to perform a lookback?

As long as employment hours are below 6 months and position is a recurring seasonal position, you would start the measurement period over each year when they return.

What happens if the seasonal employee goes back to work?

If work study employee, employee is still a seasonal employee. If not under a work study program, the employee no longer qualifies as a seasonal employee and will be tracked as a variable hour employee.

How should employers handle students that are first employed under a federal work study program and then stay employed but are no longer on work study?

Hours and weeks worked as a non-workstudy are counted toward the ACA during the measurement period.

How do you handle a part-time/seasonal employee who exceed 1560 hours in a five month period?

The look-back period would determine eligibility and since exceeded, the employee would meet the requirements and should then be offered coverage.

If someone qualifies and is in the stability period and then terminates, do we have to continue to pay for duration of stability period?

No, once person terminates, the obligation of the employer to pay ends the month following the month of termination.

How do you handle an employee that is a full-time permanent employee with benefits during most of the current look back period prior to 1/1/15 but then moves into a variable hour temporary position?

The individual is moving from a monthly measurement as a permanent employee to the look-back determination as a variable hour employee, if they meet the required hours,including the hours as a permanent employee, then they will be entitled to the insurance for the full stability period. If they remain a variable hour employee, then they will roll into the next year’s look back period and will be eligible only if they meet the necessary hours ongoing.

How do you handle an employee that does not meet the ACA FTE definition during measurement period but then increases hours and is now working in a position that is reasonably expected to meet requirements?

General guidance appears to indicate that once a person changes their hours where it is reasonably expected that they will meet the ACA FTE definition, they should be offered coverage rather than waiting to the end of the look-back measurement period.

Will 12 month university and school employees be subject to the 26 week rehire rule or the 13 week rehire rule since they work year-round?

12 month university employees are subject to the 26 week rehire rule.

Can you provide direction as to whether a summer intern (law student intern) would be a seasonal employee?

Every summer, several of our offices hire a law student intern to work. They usually work 40 hours per week, but only for the summer break. So if there is no change of that, they are considered “seasonal”. Any issue with the person who comes back the following summer? Or who works one summer, and then following graduation applies for a job with us?

If there is a chance a summer intern could be retained for Additional hours beyond the summer, it would not be allowed to classify them as a “seasonal worker”. For interns that return the following summer, as long as there is a break of more than 13 weeks in employment, which I believe in this case there would be, they would be considered a new hire when they return whether it is to intern or for more permanent employment following graduation. They would at that time be evaluated for whether they are working full time (more than 130 hours/month) and offered insurance, or if they are deemed seasonal, then it would not be required to offer them insurance.

If after a year the employee is no longer eligible for the health insurance, will COBRA coverage be available?

Yes, COBRA is available any time a covered individual loses eligibility to the insurance plan.

This will be the same policy (coverage) we currently have with NDPERS for benefited employees.

Should the employer offer coverage to an eligible employee if the employee is or can be covered by a spouse’s or parent’s plan?

Yes, according to the ACA, an employee who meets eligibility must be offered coverage regardless of being covered by a spouse’s or parent’s plan.

What is the cost of the premium?

Contact Payroll for the current rates 701.777.2158

Can an eligible employee purchase additional coverage?

The employee may purchase coverage for dependents, but not their spouse. Contact Payroll for the cost of dependent coverage 701.777.5128.

If the employee decides the family rate is too expensive, can they send the spouse and children to the marketplace for their coverage?

Anyone can apply for coverage on the exchange. However, if employer coverage was offered and it is deemed affordable, then the individual will not be eligible for the subsidy.

Will NDPERS be offering Individual + Dependent Coverage?

The rates are set through June 30, 2016 and do not include an Individual + Dependent Coverage so this will not be offered at this time.

If an employee works sporadically, how do they pay their portion of the premium?

NDPERS will bill the employer for the full premium. The agency will then need to collect the required premium from the employee, whether through payroll deduction or personal check.

Who will decide if the State is the employer or individual agencies are the employer for the definition of “Large Employer”?

The State of North Dakota will be the employer for all state organizations. For reporting purposes, there will be two Large Employer Members within the state, which are 1) state agencies & 2) higher education.

If an agency/institution hires a temporary employee who previously worked for another state agency, how is this administered for determining eligibility?

The state is the employer and therefore, the total hours worked within the measurement period for the state would need to be considered for determining eligibility.

Is there any difference if the employee works for two state agencies but is a student under one of them?

As long as the student is a non-workstudy employee, they would be treated like any other employee.

How will married state employees be handled? Will NDPERS still only allow one contract?

Decline Offer of Coverage form should be completed by the spouse that is not the contract holder. The form should be completed each year.

Does the ACA allow us not to track permanent state eligible employees who are fully benefited?

They are to be tracked under ACA guidance, however since they are being offered coverage, concerns of penalty do not apply.

Who will be notified as to who is eligible for medical insurance within our departments/colleges?

HRMS Contacts and eligible employees will be notified as soon as eligibility calculations are completed.

Being this is happening mid-fiscal year, where will the funding come from and how should it be budgeted in the future?

Departments with eligible employees that accept the offer of medical insurance, must fund it from their department budgets. If the employee’s salary is paid from appropriated funding the cost will be charged to the appropriated fringe benefit pool.

How do they define the offer of health coverage?

After identifying the eligible employees that are not currently on benefits, but have worked an average of 30 hours or more (non-workstudy), will be sent an offer of health insurance coverage middle of November. Eligible employees will have until December 5, 2014 to either accept or waive coverage in writing.

What are the responsibilities of each college/department?

As the Office of Human Resources calculates hours worked during the Measurement Period by temporary employees, respond as quickly as possible to any requests for information. Assist in following up with eligible employees in returning either their enrollment forms or waivers.

How does this affect the five-month non-benefited positions?

Employees hired in a position that is not regularly funded at 30 hours or more per week, will be immediately offered ACA health insurance coverage.