1. Employer Shared Responsibility: Transition Rules Version: October 18, 2013 1

2. Disclaimer This training material is for informational purposes only and is not intended as tax or legal advice. Please talk with your attorney or tax professional for specific questions related to your Tribe or Tribal entity as an employer. 2

3. This Training Seven 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 Look Back Measurement Method Transition Rules – IRS Reporting and Other Requirements 3

4. Transition Rules Topics Impact of One Year Delay on Transition Rules Transition Rule: Offer of Coverage to Dependents Transition Rule: Determining Large Employer Status Transition Rule: Determining Full-time Employees in 2013 More Transition Rules 4

5. Impact of One Year Delay on Transition Rules? The one year delay will impact the 2013 Transition Rules at 78 Fed. Reg. 218. It is unknown whether these 2013 to 2014 Transition Rules will be reconsidered and replaced by new transition rules given the one year delay. Look for guidance on the Transition Rules from 2014 to 2015. Not released yet. 5

6. Transition Rule: Offer of Coverage to Dependents In 2014, an employer must take steps towards offering coverage to a full- time employees’ dependents. 6

7. Transition Rule: Determining Large Employer Status This is important for an employer close to the 50 full- time employee threshold especially if employer does not currently offer health insurance to its full-time employees. 2014 Transition Relief: An employer “sufficiently close” to to the 50 full-time employee threshold can determine if it employed an average of at least 50 full-time employees on business days during any consecutive six-month period in 2013 (rather than the entire year). 7

8. Example: Transition Rule Determining Large Employer Status Tribe employed 51 full-time employees (no seasonal workers), i.e., 615.5 ÷ 12 =. – 51.3. Tribe is a large employerTransition Relief: Tribe could use the months of July through December to determine its employer status rather than the entire year. If it does this, then it employs 47 full-time employees (i.e., 286.1 ÷ 6 = 47.7). 8 JanFebMarAprMayJunJulAugSepOctNovDec FT32333536383228 29 FTE18.819.220.321.521.122.518.918.218.620.419.520.5  50.852.255.357.559.154.546.946.246.648.448.549.5

9. Transitional Rule: Determining Full- Time Employees in 2013 Large employers need to determine full-time employees in 2013 for 2014. Employers may adopt a transitional measurement period that is shorter than 12 months but that is no less than six months long and that begins no later than July 1, 2013 and ends no earlier than 90 days before the first day of the plan year beginning on or after January 1, 2014. 9

10. Example: Transitional Rule- Determining Full- Time Employees in 2013 Example: Employer with Plan Year March 1 to February 28 AP= Administrative Period Transition Measurement Period May 1-Nov 30 Transition Measurement Period May 1-Nov 30 AP Dec 1 to Feb 28 AP Dec 1 to Feb 28 Stability Period Mar 1 to Feb 28 Stability Period Mar 1 to Feb 28 2013 2014 2015 10

11. More Transitional Rules Fiscal Year Plan Start Date of July 1, 2014: An employer must use a measurement period longer than 6 months to ensure that the measurement periods starts on July 1, 2013 and ends no earlier than 90 days before the stability period ends. If an employer uses a 12-month measurement period the employer is not required to begin the measurement period by July 1, 2013. 11

12. More Transitional Rules Fiscal Year Plan as of December 27, 2012: If an employee would be eligible for coverage as of the first day of the fiscal year plan that begins in 2014 and is offered affordable, minimum value coverage no later than the first day of the 2014 plan year, an employer will not be incur an Assessable Payment for that employee for the time period before the first day of the 2014 plan year. 12

13. More Transitional Rules One or More Fiscal Year Plans: There is other relief for employers with a significant percentage of their employees eligible for or covered under one or more fiscal year plans with the same plan year as December 27, 2012 and that would like to offer certain other employees coverage under these plans. Reporting: Employer still subject to reporting requirements under section 6056 for the entire year of 2014. 13

14. Recommendations In 2014, keep apprised of new regulations, including any new rules or guidance for the transition from 2014 to 2015. If you have employees who currently work an average of 30 hours of service per week and you do not currently offer health insurance coverage to these employees (and you cannot afford to do so in 2015), then you may want to consider keeping the hours of these employees under 30 hours of service in 2014. 14

15. Section Review When does an employer have to make an offer of coverage to dependents? What is the length of the transitional measurement period an employer can use to determine the status of full-time employees? Does an employer with a fiscal year plan have to comply with the employer shared responsibility mandate by January 1 st ? 15

16. Questions 16