1. PRESENTED BY LESLIE STOPHEL MACLELLAN SEPTEMBER 27, 2013 © 2013 MACLELLAN LAW, PLLC ALL RIGHTS RESERVED FEDERAL AND STATE LAWS AND THE PRIVATE SCHOOL EMPLOYEE: OBAMACARE AND BEYOND

2. EMPLOYMENT LAWS IN TENNESSEE Wage and hour laws in Tennessee At will employment  Can be hired or fired for any reason  Subject to any contract  Subject to Fair Labor Standards Act Overtime and minimum waqe required  Over 40 hours/week FSLA exemptions  Executive, administrative or teaching professionals  At least $455/week  Specified duties Timekeeping recommended for all non-professionals “After hours” requirements?

3. EMPLOYMENT LAWS (contd) Sick, vacation, paid leave not required, unless  Contractually obligated  Subject to Federal law (see below) Federal Laws  Title VII (15 employees)  ADA (15 employees)  Age Discrimination – 40 yrs (20 employees)  Equal Pay  Family and Medical Leave Act (50 employees) Employee manuals and why I recommend

4. THE PATIENT PROTECTION AND AFFORDABLE CARE ACT OF 2010

5. AFORDABLE CARE ACT (ACA) GOALS Every individual insured Affordable and adequate insurance Create insurance exchanges to provide individuals and small employers access to insurance Require employers to “share responsibility”

6. EMPLOYER MANDATES All employers  even if govt. entity or tax exempt Must give notices to employees “Large employers” have additional requirements  Subject to reporting requirements  Subject to Employer Responsibility standards Large employer requirements delayed until 2015!

7. AM I A LARGE EMPLOYER? 50 or more Full Time Equivalent employees  30 hours/week worked is full time  Includes hours for sick days/paid leave Must include FTEs  Part time and seasonal employees are included in calculation  Part time FTE calculation  Generally part time employee counts as half FTE  Example: school has 45 full time employees and 20 part time  Total number of hours per month worked by PT/120  20 part time employees work 10 hours/week  20 X 10 (200) X 4 = 800/120 = 6.6FTEs  Total FTE is 51 employees

8. AM I A LARGE EMPLOYER? (contd) IRS/Treasury regulations require credit for summers off  Regs. apply specifically to determination of FT status for coverage/penalty issue  Unclear if also applies to determination of large employer status Control Group rules apply  “Tax controlled” group treated as single employer  Church controlled school may need to count church and school FTEs together  However, not combined for penalty assessment

9. LARGE EMPLOYER PENALTIES “No employer is required to offer insurance” HOWEVER, You may be subject to one of two penalties 1) the “no coverage” penalty  No coverage offered to full-time employees  And at least one FT employee obtains a Premium Tax Credit (PTC)  Then employer pays $2000/FT employee  Minus first 30 FT employees 2) the “unaffordability” penalty  Coverage offered but does not meet certain affordability and value standards  Then employer pays $3000/FT employee who receives PTC  But no more than “no coverage” penalty if applied 95% rule  “no coverage” penalty does not apply if 95% of FT employees receive coverage, however 5% can trigger “unaffordability” penalty

10. EMPLOYEE NOTIFICATIONS Required by October 1, 2013 Any employer subject to the FLSA (all schools) Penalty (originally $100/day) forgiven All current employees must receive All new employees within 14 days of hire DOL sample notices (attached)

11. INSURANCE EXCHANGES Set up to provide marketplace for individuals and small employers to purchase insurance Tennessee is one of 22 states choosing to allow Federal Govt. to run their exchange (KY closest state-run) Exchanges offer premium tax credit if income between 100% and 400% of Federal Poverty Level Premium subsidies if income up to 250% of FPL Small Business Health Options (SHOP) Program  Open to “small employers” (less than 50 FTEs)  Must be offered to all/accepted by 70% FT employees  Will expand to employers with up to 100 FTEs in 2016  Delayed until November 1, 2013

12. SMALL BUSINESS TAX CREDIT AVAILABLE NOW Any employer with less than 25 FTEs Who covers at least 50% of cost of single (not family) insurance Whose employees have average wages less than $50,000/year Who purchases through the SHOP marketplace (2014 and beyond) Currently 35% of premiums paid (25% for tax exempt) Jumps to 50% (35% for tax exempt) in 2014 Available for two consecutive years

13. WHERE IS THIS TRAIN GOING?

14. The Take Away Notices should be given to current employees (full and part time) by October 1, 2013 The “large employer” mandate (play or pay/reporting) will not take effect until 2015 All schools should review employee hours worked and calculate current FTEs during 2014 A school might pay a penalty only if they are 1) a “large employer” who 2) has at least one full-time employee receiving a premium credit through an exchange plan and 3) who has at least 30 full-time employees

15. QUESTIONS??? Leslie Maclellan Maclellan Law, PLLC 615-838-9670 leslie@maclellanlaw.com WWW.HealthCare.gov Kaiser Family Foundation www.kff.org

16. DISCLAIMER This presentation is provided with the understanding that the presenter is not rendering legal advice or services with respect to specific facts or circumstances. Laws are constantly changing, and each federal law, state law, and regulation should be checked for the most current version.