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Refer to the ACA Resource Center for the most up-to-date information.
“Because things are the way they are, things will not stay the way they are.” — Bertolt Brecht
This quote sums it up when it comes to the Affordable Care Act! Since the proposed regulations were released in February, some changes have occurred and we anticipate more — but many districts are still taking steps to address the coming mandate.
Disclaimer: Frontline Education does not provide tax or legal advice. We encourage you to consult your tax or legal counsel for advice specific to your district.
While the specifics have yet to be decided, the White House blog announced that they are revising and simplifying the reporting process for employers.
“We have heard the concern that the reporting called for under the law about each worker’s access to and enrollment in health insurance requires new data collection systems and coordination,” the blog states. “So we plan to re-vamp and simplify the reporting process.”
The big news stemming from this decision is that the White House has announced that they will delay employer and insurer reporting requirements until 2015 (rather than the originally proposed 2014).
“We believe we need to give employers more time to comply with the new rules,” the White House blog states. “Since employer responsibility payments can only be assessed based on this new reporting, payments won’t be collected for 2014. This allows employers the time to test the new reporting systems and make any necessary adaptations to their health benefits while staying the course toward making health coverage more affordable and accessible for their workers.”
Sigh of relief, right? For sure, most employers are happy to have the pressure scaled back a little bit while they figure out how to handle tracking and benefits for the ACA.
But the delay is not just to push off the new requirements. The Administration is calling next year a “practice year” and urging employers to set up, test and adjust their plans for reporting and offering benefits so they are securely in place by 2015.
“Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015,” the U.S. Treasury blog advises.
Districts that have already planned how they will handle the reporting are in a good place and can continue learning throughout the next year. Districts that have not yet started, however, should not wait too long, remembering that the look-back measurement period requires collection of data from the previous 3-12 months.
The Administration says they plan to release proposed reporting regulations sometime this summer.
While not a change, one point of the regulations that we did emphasize in our first post on the ACA is that 130 hours a month is also a threshhold for being considered full-time.
According to the proposed regulations, the law “would treat 130 hours of service in a calendar month as the monthly equivalent of 30 hours of service per week ((52 x 30) ÷ 12 = 130).”
Depending on the length of the month, 130 hours could be more or less than 30 hours a week. The idea is that over the course of the 3-12 month measurement period, the difference in the lengths of the months would balance out.
Districts should take steps to track not only the hours worked per week but also per month to comply with the regulations.
Lest districts think they can slip under the radar without complying with the ACA, think again.
“We were told the Department of Labor has hired 1,500 people to police us [on computing and tracking hours],” Cartersville City Schools Superintendent Howard Hinesley said in a recent business session.
Cartersville City and many other districts are planning to implement a substitute placement and absence management system to track and limit substitute hours. An automated sub-calling system tracks the hours substitute teachers are working as they accept jobs (teacher absences) in the district. Some systems can even set a limit sub hours worked per day, week or month.
The Blue Springs School District recently purchased Aesop, from Frontline Technologies, to track hours for substitutes.
“So many are going to be caught off guard with this,” the superintendent said. “They don’t know what is going on, so many people are going to come up short (when the policy goes into effect).”
When it comes to offering benefits, some districts are planning to just pay the extra cost. Many districts, however, are already facing huge budget cuts and shortfalls and are reacting by cutting hours for part-time employees like custodians, bus drivers, aides, and substitutes.
Wake County School System in North Carolina said paying benefits for even just a third of substitutes in the district would cost $5.2 million. The district is considering cutting hours to avoid this cost.
Lafayette School Corp. in Indiana reduced hours for approximately 600 employees to prevent the employees from qualifying as “full-time.”
“We would have to go to the taxpayers and ask for some type of increase, and I just don’t see that happening,” the superintendent said.
For some districts this action is an option; others need to go through union negotiations first.
Greater Nanticoke School District in Pennsylvania, for example, is looking at reducing hours for teacher aides, but increasing their wages in exchange for the cut.
Still others are considering outsourcing their substitute teachers to a staffing firm to avoid handling substitute benefits all-together. As employees of the staffing firm, substitutes would be recruited, trained and paid by the firm rather than the district.
The Affordable Care Act is still changing, but it is still coming. If you are not already, begin talks with your legal counsel and the business and HR departments to determine how you will begin to prepare for the law.
We’re just scratching the surface of the healthcare regulations. Check out some of these great resources for more detailed information.
Final Regulations Fact Sheet: An overview of the final regulations for Employer Shared Responsibility
Final Regulations – Full: The full regulations on Employer Shared Responsibility – 227 pages!
How Are Districts Preparing for the ACA? INFOGRAPHIC: What districts are doing to prepare
Healthcare Reform Q&A for Employers: Got questions? Check out a whopping 370 FAQs on the Healthcare Reform. (Gallagher Benefit Services: January 31, 2014)
Making the ‘Play or Pay’ Decision: An informative article weighing the financial pros and cons of providing benefits or not. (SHRM: February 4, 2013)
How is your district handling the Affordable Care Act?