1. Rise to the Challenge and Act Now
Welcome comments
NOTES TO SPEAKER:
Health Care Reform is a complex law that cannot be fully comprehended through several hours of training.  People delivering this content should not hold themselves out as experts of Health Care Reform, because to be an expert would require knowledge that you would acquire through extensive research and training beyond what we are able to provide in these sessions.

2. Agenda – Three Things & A Story
What is the ACA
How it will affect you
What you can do about it
But…. first a story!
You already know that Health Care Reform is big and requires your ongoing focus and attention. The Affordable Care Act has changed how employers must think about and provide benefits. Your organization probably has already taken steps in response to different ACA mandates.
For example, your organization has already decided whether or not maintain its existing health plan coverage and remain grandfathered. Non-grandfathered plans are free to change their plan design, but are subject to more ACA changes sooner. For non-grandfathered plans, dependent child coverage had to be extended to age 26 starting in September Looking forward, the ACA requires changes in how employers manage their workforce. You must also give careful consideration to potentially devastating financial penalties that will apply in the future.
Today, we are going to focus on Shared Responsibility, also known as the “employer mandate.” Why? Businesses with 50 or more employees must offer health insurance to full-time employees in 2014 or pay a penalty. Employers have many things to contemplate and decide. Today we’ll take you through questions your business should be analyzing right now.
© Copyright 2013 ADP, Inc. Proprietary and Confidential Information.

3. © Copyright 2013 ADP, Inc. Proprietary and Confidential Information.
Who Moved My Cheese
Two little People
Hem & Haw
Two little mice:
Sniff & Scurry
The Affordable Care Act, related legislation, and corresponding regulations are extremely long and constantly evolving. The Affordable Care Act legislation (the bill introduced in Congress) was over 2,000 pages long and the final law had almost 1,000 pages. This is longer than the longest Harry Potter book. I have not counted the exact number of words, but I have read that the law has approximately 384,000 words. There are estimates that the final regulations will eventually total over 2 million words.
Implementing some parts of the law will entail extensive rulemaking and other actions by federal agencies; other changes will be largely self-executing, based on statutory requirements. The law also creates a variety of new commissions and advisory bodies, some with substantial-decision making authority. New regulations are constantly being issued by multiple federal agencies such as the Treasury, IRS, Department of Health and Human Services, as well as the Department of Labor. Some parts of the ACA have even been repealed, such as the CLASS Act which would have provided a mechanism for long-term care insurance. You need to be aware of all this.
© Copyright 2013 ADP, Inc. Proprietary and Confidential Information.

4. © Copyright 2013 ADP, Inc. Proprietary and Confidential Information.
Who Moved My Cheese
Hem & Haw
We know the story…..
Didn’t know or didn’t care that the cheese was going to run out
Not aware that things might change
The Affordable Care Act, related legislation, and corresponding regulations are extremely long and constantly evolving. The Affordable Care Act legislation (the bill introduced in Congress) was over 2,000 pages long and the final law had almost 1,000 pages. This is longer than the longest Harry Potter book. I have not counted the exact number of words, but I have read that the law has approximately 384,000 words. There are estimates that the final regulations will eventually total over 2 million words.
Implementing some parts of the law will entail extensive rulemaking and other actions by federal agencies; other changes will be largely self-executing, based on statutory requirements. The law also creates a variety of new commissions and advisory bodies, some with substantial-decision making authority. New regulations are constantly being issued by multiple federal agencies such as the Treasury, IRS, Department of Health and Human Services, as well as the Department of Labor. Some parts of the ACA have even been repealed, such as the CLASS Act which would have provided a mechanism for long-term care insurance. You need to be aware of all this.
© Copyright 2013 ADP, Inc. Proprietary and Confidential Information.

5. © Copyright 2013 ADP, Inc. Proprietary and Confidential Information.
Who Moved My Cheese
Sniff & Scurry
They were aware changes were happening
Didn’t expect things to stay the same
Didn’t get wrapped up on why the change
Proactive to find new cheese
The Affordable Care Act, related legislation, and corresponding regulations are extremely long and constantly evolving. The Affordable Care Act legislation (the bill introduced in Congress) was over 2,000 pages long and the final law had almost 1,000 pages. This is longer than the longest Harry Potter book. I have not counted the exact number of words, but I have read that the law has approximately 384,000 words. There are estimates that the final regulations will eventually total over 2 million words.
Implementing some parts of the law will entail extensive rulemaking and other actions by federal agencies; other changes will be largely self-executing, based on statutory requirements. The law also creates a variety of new commissions and advisory bodies, some with substantial-decision making authority. New regulations are constantly being issued by multiple federal agencies such as the Treasury, IRS, Department of Health and Human Services, as well as the Department of Labor. Some parts of the ACA have even been repealed, such as the CLASS Act which would have provided a mechanism for long-term care insurance. You need to be aware of all this.
© Copyright 2013 ADP, Inc. Proprietary and Confidential Information.

6. © Copyright 2013 ADP, Inc. Proprietary and Confidential Information.
Who Moved My Cheese
The Moral of the story
Sooner or later we will experience change
When you can read the writing on the wall you can do well in changing times!
The Affordable Care Act, related legislation, and corresponding regulations are extremely long and constantly evolving. The Affordable Care Act legislation (the bill introduced in Congress) was over 2,000 pages long and the final law had almost 1,000 pages. This is longer than the longest Harry Potter book. I have not counted the exact number of words, but I have read that the law has approximately 384,000 words. There are estimates that the final regulations will eventually total over 2 million words.
Implementing some parts of the law will entail extensive rulemaking and other actions by federal agencies; other changes will be largely self-executing, based on statutory requirements. The law also creates a variety of new commissions and advisory bodies, some with substantial-decision making authority. New regulations are constantly being issued by multiple federal agencies such as the Treasury, IRS, Department of Health and Human Services, as well as the Department of Labor. Some parts of the ACA have even been repealed, such as the CLASS Act which would have provided a mechanism for long-term care insurance. You need to be aware of all this.
© Copyright 2013 ADP, Inc. Proprietary and Confidential Information.

7. © Copyright 2013 ADP, Inc. Proprietary and Confidential Information.
Disclaimer
This presentation is not:
Legal advice
Tax advice
The final word on Health Care Reform
A political opinion
Before we get started I need to remind you that I am not an attorney or tax professional, and ADP does not provide legal services. Today’s seminar is provided for informational purposes only and is not intended as legal or tax advice.
This presentation is not the final word on Health Care Reform. There is no final picture or guidebook, as many parts of HCR are not finalized and still in flux. Based on the Supreme Court decision this past summer and the November election results, we will all be learning about and talking about the impact of Health Care Reform on employers for a long time.
Finally, this presentation is not a political opinion. The subject matter of Health Care Reform can be politically charged. The law itself is easy to distort and misrepresent as we’ve seen with some media coverage. Keep in mind that ADP is a service provider to employers of all types – union, non-union, conservative, liberal, libertarian – you name it. By design, we are not political.
© Copyright 2013 ADP, Inc. Proprietary and Confidential Information.

8. Why the ACA – Why it came to be?
What:
The Patient Protection and Affordable Care Act will ensure that all Americans have access to quality, affordable health care and will create the transformation within the health care system necessary to contain costs.
Why:
Healthcare crisis: Over 30 to 60 Million American’s don’t have access to Healthcare.
Cost: Healthcare costs are skyrocketing, rising 2 -3 x of inflation.
Coverage denial: Too many Americans were being denied coverage (pre-existing conditions, etc).
Lack of scale: Our current healthcare system is not efficient.
How:
Business: Any large employer (50+ employees) must offer health insurance or pay a penalty.
State Government: State Government is required to set up healthcare exchanges to more efficiently distribute healthcare to it’s constituents.
Before we get started I need to remind you that I am not an attorney or tax professional, and ADP does not provide legal services. Today’s seminar is provided for informational purposes only and is not intended as legal or tax advice.
This presentation is not the final word on Health Care Reform. There is no final picture or guidebook, as many parts of HCR are not finalized and still in flux. Based on the Supreme Court decision this past summer and the November election results, we will all be learning about and talking about the impact of Health Care Reform on employers for a long time.
Finally, this presentation is not a political opinion. The subject matter of Health Care Reform can be politically charged. The law itself is easy to distort and misrepresent as we’ve seen with some media coverage. Keep in mind that ADP is a service provider to employers of all types – union, non-union, conservative, liberal, libertarian – you name it. By design, we are not political.
© Copyright 2013 ADP, Inc. Proprietary and Confidential Information.

9. Act Now – Employer Shared Responsibility

10. What Do Employers Need to Consider Now? Workforce Planning
50 or more full-time equivalents (FTEs)
Employer offers coverage
Tax credit obtained by at least one full-timer because coverage is “unaffordable” or does not meet “minimum value
Annual penalty of $3,000 per full-timer who receives the credit
Tax credit not obtained by any full-timer
Employee Elects Plan
No employer penalty
Employee rejects Plan
Employee buys own plan
Employee opts to forgo insurance and pay individual assessment
Employer does not offer coverage
Tax credit obtained by at least one full-timer
Annual penalty of $2,000 X full-timers (after the first 30*)
Less than 50 full-time equivalents (FTEs)
Determine who will certainly work 30 hours per week or more and who will certainly work fewer than 30 hours per week. These employees can be removed from consideration because you know for certain whether you will need to offer healthcare coverage or not to these employees.
Which employees are on the bubble? Determine which employees you cannot tell with certainty the number of hours these employees will work per week on average. Consider how often will these employees' hours vary. Will they work 30 hours per week on average or is there no way of telling at the outset?
Are your seasonal employees, if any, expected to work for more than 4 calendar months?
Determine the affordability of the coverage you intend to offer. The regulations provide that, to be affordable, the cost of coverage must be less than 9.5% of the employee's household income, but the agencies have provided a safe harbor for employers to use the employee's current box 1, W-2 wages as a basis of determination. There are additional safe harbors that are available as well, such as ones based on an employee’s rate of pay, or the federal poverty level.
© Copyright 2013 ADP, Inc. Proprietary and Confidential Information.

11. © Copyright 2013 ADP, Inc. Proprietary and Confidential Information.
Darden Restaurants
Experimented with more part time employees last fall
Sales dropped:
Lack of consistent workforce
Difference in talent (part time vs. full)
Did this effect their service profit chain?
The Affordable Care Act, related legislation, and corresponding regulations are extremely long and constantly evolving. The Affordable Care Act legislation (the bill introduced in Congress) was over 2,000 pages long and the final law had almost 1,000 pages. This is longer than the longest Harry Potter book. I have not counted the exact number of words, but I have read that the law has approximately 384,000 words. There are estimates that the final regulations will eventually total over 2 million words.
Implementing some parts of the law will entail extensive rulemaking and other actions by federal agencies; other changes will be largely self-executing, based on statutory requirements. The law also creates a variety of new commissions and advisory bodies, some with substantial-decision making authority. New regulations are constantly being issued by multiple federal agencies such as the Treasury, IRS, Department of Health and Human Services, as well as the Department of Labor. Some parts of the ACA have even been repealed, such as the CLASS Act which would have provided a mechanism for long-term care insurance. You need to be aware of all this.
© Copyright 2013 ADP, Inc. Proprietary and Confidential Information.

12. After Pay or Play – What else?
Notice of Exchange
Minimum Value Requirements (60%)
Automatic Enrollment
Benefit Costs included on your W-2
Medical Loss Ratios
Dependent coverage to 26 year olds
Expansion of Wellness incentives
Cadillac Plan - Penalty
The Affordable Care Act, related legislation, and corresponding regulations are extremely long and constantly evolving. The Affordable Care Act legislation (the bill introduced in Congress) was over 2,000 pages long and the final law had almost 1,000 pages. This is longer than the longest Harry Potter book. I have not counted the exact number of words, but I have read that the law has approximately 384,000 words. There are estimates that the final regulations will eventually total over 2 million words.
Implementing some parts of the law will entail extensive rulemaking and other actions by federal agencies; other changes will be largely self-executing, based on statutory requirements. The law also creates a variety of new commissions and advisory bodies, some with substantial-decision making authority. New regulations are constantly being issued by multiple federal agencies such as the Treasury, IRS, Department of Health and Human Services, as well as the Department of Labor. Some parts of the ACA have even been repealed, such as the CLASS Act which would have provided a mechanism for long-term care insurance. You need to be aware of all this.
© Copyright 2013 ADP, Inc. Proprietary and Confidential Information.

13. What Do Employers Need to Consider Now? Workforce Planning
Is the company a “large” employer?
How many full-time (30 or more hours of service per week) employees do you have?
Do you have any seasonal employees?
With the new definition of full-time, who will be newly eligible for healthcare coverage?
Will there be an increased cost, based on the newly eligible employees?
Will the company continue to offer healthcare coverage, based on those increased costs?
Before we get into any of the nitty-gritty details on Shared Responsibility, we think it’s important for you to take the time now to consider certain questions that will help you prepare for the details of the Shared Responsibility requirements.
Is your company a “large” employer? How many employees do you have working more than 30 hours per week? We will discuss what constitutes a "large" employer and how to determine full-time status in just a moment.
Do you have any seasonal employees? More guidance is expected on what constitutes a seasonal employee, but for now a good-faith interpretation of existing DOL guidance will suffice.
Under the Shared Responsibility rules, which of your employees are now eligible for healthcare coverage? Is this a larger number than in the past? What types of positions are newly eligible for healthcare coverage? Are these positions for which you would have offered benefits in the past? What are your turnover rates? What effect will this have on ongoing eligibility for healthcare coverage?
Will your company decide to play and offer healthcare coverage?
If you don’t offer coverage, will your company still be seen as an employer of choice? Are other employers in your geography/industry offering coverage or opting out?
What other considerations are there when determining whether to continue offering healthcare coverage?
How will employee morale/satisfaction be affected by changes in hours or a decision to not offer healthcare coverage?
© Copyright 2013 ADP, Inc. Proprietary and Confidential Information.

14. What Do Employers Need to Consider Now? Workforce Planning
Determine number of definite full-time and part-time employees.
Determine number of variable hour employees (those on the bubble around 30 hours per week).
Determine number of seasonal employees and for how many months they are employed each year (using a “good-faith” determination of “seasonal” based on existing DOL guidance).
Run calculations to determine if the coverage is “affordable” - determine whether the cost of self-only coverage is greater than 9.5% of any full-time employee's W-2, box 1 wages.
Determine who will certainly work 30 hours per week or more and who will certainly work fewer than 30 hours per week. These employees can be removed from consideration because you know for certain whether you will need to offer healthcare coverage or not to these employees.
Which employees are on the bubble? Determine which employees you cannot tell with certainty the number of hours these employees will work per week on average. Consider how often will these employees' hours vary. Will they work 30 hours per week on average or is there no way of telling at the outset?
Are your seasonal employees, if any, expected to work for more than 4 calendar months?
Determine the affordability of the coverage you intend to offer. The regulations provide that, to be affordable, the cost of coverage must be less than 9.5% of the employee's household income, but the agencies have provided a safe harbor for employers to use the employee's current box 1, W-2 wages as a basis of determination. There are additional safe harbors that are available as well, such as ones based on an employee’s rate of pay, or the federal poverty level.
© Copyright 2013 ADP, Inc. Proprietary and Confidential Information.

15. © 2013, ADP, Inc. Proprietary and Confidential Information.
ADP Offers an Integrated Approach to Manage Workforce Planning and Administration
ADP
Time and Labor Management
ADP
Benefits
• Full-Time Status Warnings
• Full-Time Threshold Indicator Based on ACA Definitions
• Work Schedule Dashboard
• Full-Time Status Reporting
• Auto-enrollment Required in 2015
• Enrollment of Eligible Employees
• Coverage Termination
• W-2 Affordability Calculation
Eligibility
Enrollment
• Data to/from Exchanges
• Reporting to Federal Government
• Reconcile Penalties Levied for Exchange Participation
Reporting/ Penalties
Affordability
• Deductions and Other Earnings
• W-2 Earnings
• System of Record for Hours of Service
• Look-Back Approach
ADP
Payroll
ADP
Reporting and Reconciliation
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16. © Copyright 2011 ADP, Inc. Proprietary and Confidential Information.
Closing Remarks
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