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HomeMy WebLinkAbout2015-06-11 - Resolution No. 15-10 RESOLUTION NO. 15-10 RESOLUTION OF THE BOARD OF DIRECTORS OF THE YORBA LINDA WATER DISTRICT ADOPTING A PATIENT PROTECTION AND AFFORDABLE CARE ACT POLICY WHEREAS, the Yorba Linda Water District is considered a "large employer" for the purposes of the Shared Responsibility Provisions (Section 4980H of Title 26 of the United States Code, the Internal Revenue Code) of the Patient Protection and Affordable Care Act; and WHEREAS, the District is also considered a "large employer" for the purposes of Section 6056 to Title 26 of the United States Code and, therefore, is subject to the reporting requirements referenced therein. NOW THEREFORE BE IT RESOLVED by the Board of Directors of the Yorba Linda Water District as follows: Section 1. The Board of Directors does hereby adopt a "Patient Protection and Affordable Care Act Policy" as attached hereto and by this reference incorporated herein. PASSED AND ADOPTED this 11th day of June 2015, by the following called vote: AYES: Directors Beverage, Collett, Hawkins, Kiley and Melton NOES: None ABSTAIN: None ABSENT: None Ric Collett, President Yorba Linda Water District ATTEST: / Marc Marcant nio, Board Secretary Yorba Linda Water District 'v1 .r 91.E Resolution No. 15-10 Adopting the Patient Protection and Affordable Care Act Policy 1 Reviewed as to form by Labor Counsel: .� Connie Almond, Esq. Liebert Cassidy Whitmore LLP Resolution No. 15-10 Adopting the Patient Protection and Affordable Care Act Policy 2 Policies and Procedures Policy No.: 7010-015 Effective Date: June 11, 2015 Prepared By: Gina Knight, Human Resources/Risk Manager Delia Lugo, Finance Manager Applicability: District Wide POLICY: PATIENT PROTECTION AND AFFORDABLE CARE ACT 1.0 PURPOSE The Yorba Linda Water District (“District”) is considered a “large employer” for the purposes of the Shared Responsibility Provisions (Section 4980H of Title 26 of the United States Code, the Internal Revenue Code) of the Patient Protection and Affordable Care Act (“ACA”). The District is also considered a “large employer” for the purposes of Section 6056 to Title 26 of the United States Code and, therefore, is subject to the reporting requirements referenced therein. The Internal Revenue Service will assess a penalty on the District if (1) it fails to offer “substantially all” of its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage or offers coverage to “substantially all” of its full-time employees (and their dependents) that is either “unaffordable” or does not provide “minimum value” and (2) any full-time employee receives a subsidy for coverage through the exchange (“Employer Mandate”). Starting in 2016, the IRS will require the District to report the identity of, number of, and coverage offered to, full-time employees, subject to certain potential alternative reporting. This Administrative Policy (“Policy”) establishes the “Look Back Measurement Method Safe Harbor” (“Look Back Safe Harbor”) under the ACA. The District establishes the Look Back Safe Harbor for purposes of identifying “full-time” employees for the IRS reporting requirements related to the Employer Mandate as to all employees. The District also establishes this Look Back Safe Harbor for the purpose of determining qualification for an offer of coverage as to all unrepresented employees. Unrepresented employees who are determined to be “full-time” under the Look Back Safe Harbor will qualify for an offer of coverage. Nothing in this Policy shall be construed as the District’s determination of eligibility for health coverage as to any represented employee. For all represented employees, Patient Protection and Affordable Care Act 1 7010-015 qualification for health coverage shall continue to be governed by the terms of any applicable Memorandum of Understanding or other applicable contract. This Policy also establishes the Affordability Safe Harbors to determine affordability of coverage offered, if any, for the Employer Mandate and reporting requirements. 2.0 LOOK BACK MEASUREMENT METHOD SAFE HARBOR The District adopts the Look Back Safe Harbor in order to determine the Hours of Service of all employees. Hours of Service are measured during the specified measurement period, subject to the rules set forth hereunder. If the employee averages 30 Hours of Service per week over the course of the specified measurement period, the District will report to the IRS the employee’s status as full-time under the ACA for months during the stability period associated with that measurement period, subject to the following rules. Unrepresented employees who average 30 Hours of Service per week over the course of the specified measurement period, will receive an offer of coverage from the District during the associated stability period, subject to the rules set forth herein. If the District reports an employee to the IRS as full-time for purposes of the Employer Mandate, the employee does not become full-time for any other purpose. A. Hours of Service Calculation “Hours of Service” means each hour for which an employee is paid, or entitled to payment by the District for a period of time during which no duties are performed due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence. The term “Hour(s) of Service” does not include any hour of services performed as a bona fide volunteer. 1. For Hourly Employees: The District will calculate actual Hours of Service from records of hours worked and hours for which payment is made or due. 2. For Non-Hourly Employees: The District will apply one of the following three methods on a reasonable and consistent basis. a. Calculate actual Hours of Service from records of hours worked and hours for which payment is made or due; b. Calculate Hours of Service using a days-worked equivalency (8 hours per day for each day employee is credited with an Hour of Service); or c. Calculate Hours of Service using a weeks-worked equivalency (40 hours per week for each week employee is credited with an Hour of Service). Patient Protection and Affordable Care Act 2 7010-015 3. Bona fide Volunteer: The District is not required to determine Hours of Service for a bona fide volunteer. A bona fide volunteer is an individual whose only compensation from the District is in the form of (a) reimbursement (or reasonable allowance) for reasonable expenses incurred in the performance of volunteer service; or (b) reasonable benefits and nominal fees, customarily paid by similar entities in connection with the performance of services by volunteers. B. Ongoing Employees An ongoing employee is an employee who has been employed for at least one complete standard measurement period. The District establishes the Look Back Safe Harbor with regard to all ongoing employees as follows: Standard Measurement Period: November 2 through November 1 (starting November 2, 2013 and continuing each year thereafter) Administrative Period: November 2 through December 31 (starting November 2, 2014 and continuing each year thereafter) Stability Period: January 1 through December 31 (starting January 1, 2015 and continuing each year thereafter) If an ongoing employee’s employment status changes (from full-time to less than full-time or vice versa) before the end of a Stability Period, the change in status will not affect the classification of that employee’s status for the remaining portion of the Stability Period. C. New Employees Hired After November 2, 2013 For an employee hired after November 2, 2013, the District will determine which of the following applies: 1. New Seasonal Employees: An employee who is hired into a position for which the customary annual employment is six months or less is a seasonal employee. The District will measure a new seasonal employee’s Hours of Service using the initial measurement period indicated in Section E. 2. New Non-Seasonal Employees: On the start date of a new non-seasonal employee, the District will determine (based on the facts and circumstances at the employee’s start date) whether the employee is reasonably expected to be a full-time employee. The District will look at Patient Protection and Affordable Care Act 3 7010-015 the following factors to determine whether an employee is reasonably expected to be a full-time employee: a. Whether the employee is replacing a full-time employee; b. Extent to which Hours of Service of ongoing employees in the same or comparable positions have varied above and below an average of 30 Hours of Service per week during recent measurement periods; c. Whether the job was advertised or communicated to the employee as requiring an average of 30 or more Hours of Service per week; d. Whether the job was documented (through a contract or job description) as requiring an average of 30 or more Hours of Service per week. No single factor is determinative. 3. New Full-Time Employees: If the District determines (pursuant to Section C.2.) that the employee is reasonably expected to average at least 30 Hours of Service per week, then the employee will be a full-time employee. The District will measure a new full-time employee’s Hours of Service on a monthly basis pursuant to Section D until the employee becomes an ongoing employee. Represented employees will be offered coverage, if any, as set forth in their applicable memoranda of understanding. Unrepresented employees will be offered coverage within 60 days if the District determines that the employee is reasonably expected to average at least 30 Hours of Service per week according to Section C.2. 4. New Part-Time Employees: If the District determines (pursuant to Section C.2.) that the employee is reasonably expected to average less than 30 Hours of Service per week during the initial measurement period, then the employee will be a part-time employee. The District will measure a new part-time employee’s Hours of Service using the initial measurement period indicated in Section E. 5. New Variable Hour Employees: If the District cannot determine (pursuant to Section C.2.) whether the employee is reasonably expected to be employed on average at least 30 Hours of Service per week during the initial measurement period because the employee’s hours are variable or uncertain, then the employee will be a variable hour employee. The District may not take into account the likelihood that the employee may terminate employment before the end of the initial measurement period when identifying a variable hour employee. The District will measure a Patient Protection and Affordable Care Act 4 7010-015 new variable hour employee’s Hours of Service using the initial measurement period indicated in Section E. D. New Full-Time Employees New full-time employees are measured monthly until they become ongoing employees. The District must calculate actual Hours of Service for each calendar day of the month. If the employee averages at least 130 Hours of Service, the employee will be considered full-time for that month. E. New Variable Hour, New Seasonal, and New Part-Time Employees The District establishes the following periods for new variable hour, new seasonal, and new part-time employees: Initial Measurement Period: Twelve months (beginning on the first of the month following the new employee’s start date, unless the start date is the first of a calendar month in which case the period begins on the start date) Administrative Period: One month following the initial measurement period. Stability Period: Twelve months following the administrative period unless the new variable hour, new part-time or new seasonal employee does not measure as a full-time employee during the initial measurement period, then the stability period associated with the initial measurement period must not exceed the remainder of the standard measurement period (plus any associated administrative period). The District will use these periods with regard to represented employees only for IRS reporting purposes or, if necessary, determining potential penalties. The District will not use these periods to determine whether a represented employee qualifies for an offer of coverage, as that determination is made in the memorandum of understanding. The District will use these periods with regard to unrepresented employees to determine eligibility of coverage and for IRS reporting purposes. During the Administrative Period, the District will offer coverage to an unrepresented employee who averaged 30 or more Hours of Service over the course of an Initial Measurement Period, to become effective during the following Stability Period. The District will not offer coverage to Patient Protection and Affordable Care Act 5 7010-015 unrepresented employees who average less than 30 Hours of Service over the course of an Initial Measurement Period. F. New Variable Hour, New Seasonal, or New Part-Time Employee’s Change in Status During Initial Measurement Period If a new variable hour, seasonal, or part-time employee’s position changes during the initial measurement period, and had the employee started his or her employment in that new position, the District would have reasonably expected that new employee to average at least 30 Hours of Service per week, then for purposes of identifying a full-time employee for reporting purposes only, an employee will be considered a full-time employee on the earlier of (1) the first day of the fourth full calendar month following the change in employment status, or (2) the first day of the first month following the end of that employee’s initial measurement period (including any associated administrative period) if the employee averaged 30 or more Hours of Service per week during the initial measurement period or earlier if required by law, an applicable Memorandum of Understanding, or policy or procedure. An unrepresented employee who is a new variable hour, part-time, or seasonal employee whose position changes during the initial measurement period, and had the employee started his or her employment in that new position, the District would have reasonably expected that new employee to average at least 30 Hours of Service per week, will be offered coverage within 60 days of starting in the new position. G. Transitioning from New to Ongoing Employee The District will measure the Hours of Service of a new variable hour, new seasonal, or new part-time employee during the first complete standard measurement period for which he/she is employed. This means that a new variable hour, new part-time or new seasonal employee’s status may be measured under an initial measurement period and, at the same time, be measured under the overlapping standard measurement period. 1. If an employee’s Hours of Service measure as full-time during the initial measurement period, he/she will retain full-time status for the entire associated stability period (even if the employee does not qualify as full- time during the first full standard measurement period). The District will offer coverage to an unrepresented employee whose Hours of Service measure as full-time during the initial measurement period to become effective at the start of the stability period associated with the initial measurement period. 2. If an employee’s Hours of Service do not measure as full-time during the initial measurement period, but do measure as full-time during the standard measurement period, the employee must be treated as full-time during the stability period associated with the standard measurement Patient Protection and Affordable Care Act 6 7010-015 period (even if that stability period starts before the end of the stability period associated with the initial measurement period). The District will offer coverage to an unrepresented employee whose Hours of Service measure as full-time during the standard measurement period to become effective at the start of the stability period associated with the standard measurement period. H. Calculating Hours of Service Based on Payroll Periods Under the Look Back Safe Harbor The District may calculate hours based on payroll periods when calculating Hours of Service over any measurement period. It has two options for doing so. The District may exclude the entire payroll period that contains November 2 (the first day of the Standard Measurement Period), as long as it includes the entire payroll period that contains November 1 (the last day of the Standard Measurement Period). Alternatively, the District may exclude the entire payroll period that contains November 1 (the last day of the Standard Measurement Period), as long as it includes the entire payroll period that contains November 2 (the first day of the Standard Measurement Period). I. Breaks In Service When an employee experiences a break in service, the employee will retain the status the employee had previously with respect to any stability period, except that an employee will be treated as a new employee: 1. If the employee resumes employment after a period of at least 13 consecutive weeks with less than one Hour of Service; or 2. If the employee’s period of no service (measured in weeks) is at least four consecutive weeks long and exceeds the number of weeks of that employee’s period of employment immediately preceding the period of no service (after application of averaging Special Unpaid Leave as set forth in Section J). J. Special Unpaid Leave Special Unpaid Leave is defined only as unpaid leave under the Family and Medical Leave Act of 1993, unpaid leave under the Uniformed Services Employment and Reemployment Rights Act of 1994, or unpaid leave on account of jury duty. When an employee takes Special Unpaid Leave, the District will determine the weekly average Hours of Service by the employee for that portion of the measurement period that is not part of the Special Unpaid Leave (“Average Weekly Hours of Service”). The District will then determine, on a consistent basis, the average Hours of Service for the entire measurement period using one of the following two methods: Patient Protection and Affordable Care Act 7 7010-015 1. Exclude the period of Special Unpaid Leave and apply the Average Weekly Hours of Service over the entire measurement period; or 2. Credit the Average Weekly Hours of Service to the period of Special Unpaid Leave. 3.0 AFFORDABILITY SAFE HARBORS The District intends to apply the Rate of Pay Safe Harbor to determine the affordability of the minimum essential coverage that it offers its full-time employees. The District in its sole discretion may also apply the Form W -2 Safe Harbor or Federal Poverty Line Safe Harbor. These affordability safe harbors will be applied on a uniform and consistent basis for all employees in a reasonable category. A. Rate of Pay Safe Harbor 1. The District measures whether the employee’s required premium contribution for the calendar month to the lowest cost self-only coverage that provides minimum value exceeds 9.5 percent of the monthly wage. 2. For hourly employees, the monthly wage is equal to 130 hours multiplied by the employee’s lowest hourly rate of pay as of the first day of the coverage period or the employee’s lowest hourly rate of pay during the calendar month, whichever is lower. 3. For salaried employees, the monthly wage is the monthly salary as of the first day of the coverage period. However, if the monthly salary is reduced, including due to a reduction in work hours, the safe harbor is not available. 4. The coverage offered by the District will be deemed affordable if the employee’s monthly premium contribution is equal to or less than 9.5 percent of the monthly wage. B. Form W -2 Safe Harbor 1. The District measures whether the employee’s required premium contribution for the full calendar year for the lowest cost self-only coverage that provides minimum value exceeds 9.5 percent of the Form W-2 wages (as reported in Box 1) for the employee for the calendar year in which coverage is offered. 2. For an employee who is not offered coverage for an entire calendar year, the District must adjust that employee’s Form W -2 wages to reflect the period for which coverage was offered. To adjust wages, the Form W -2 wages are multiplied by a fraction equal to the number of calendar months Patient Protection and Affordable Care Act 8 7010-015 the District offered coverage over the number of calendar months in the period of employment during the calendar year. 3. The coverage offered by the District will be deemed affordable if the employee’s annual premium contribution is equal to or less than 9.5 percent of the employee’s Form W -2 wages as reported in Box 1 (or as adjusted, for an employee who is not offered coverage for an entire calendar year). C. Federal Poverty Line Safe Harbor 1. The District measures whether the employee’s required premium contribution for the calendar month for the lowest cost self-only coverage that provides minimum value exceeds 9.5 percent of an amount determined by dividing the Federal Poverty Line (“FPL”) for a single individual for the applicable calendar year by twelve. 2. The District will use the FPL in effect within six months before the first day of the plan year. 3. The coverage offered by the District will be deemed affordable if the employee’s monthly premium contribution is equal to or less than 9.5 percent of the monthly FPL for a single individual for the applicable calendar year. 4.0 REVISIONS/UPDATES TO ADMINISTRATIVE POLICY This Administrative Policy is subject to change as regulations and guidance are issued relating to the ACA. The Human Resources/Risk Manager, including his/her designee(s), may amend this Policy at his/her discretion. Legal Authority: Title 26 United States Code section 4980H, (Internal Revenue Code); Shared Responsibility for Employers Regarding Health Coverage, 26 CFR Parts 1, 54 and 301, 79 Fed. Reg. 8544 (Feb. 12, 2014); Title 26 United States Code section 6056, (Internal Revenue Code); Information Reporting by Applicable Large Employers on Health Insurance Coverage Offered Under Employer Sponsored Plans, 26 CFR Parts 301 and 602, 79 Fed. Reg. 13231 (March 10, 2014). Patient Protection and Affordable Care Act 9 7010-015 5.0 EXHIBITS Exhibit A-Patient Protection and Affordable Care Act Acknowledgment Form APPROVED: ~ ~ arc Mrrcnt0n io I Date General Manager Patient Protection and Affordable Care Act 10 7010-015 Exhibit A Patient Protection and Affordable Care Act Policy Acknowledgement Form I acknowledge that I have received and read the provisions contained in this Patient Protection and Affordable Care Act Policy. I understand that it is my responsibility to consult my supervisor or the Human Resources Department if I have any questions that are not answered in the Policy. I also understand that the provisions in this Policy are guidelines and may not address all circumstances that may arise. In such cases, the Human Resources Department shall apply the Policy based on factors including but not limited to past practices and rules of statutory interpretation. ________________________________________ Employee Name (Printed) ________________________________________ Employee Signature ________________________________________ Date Distribution: Original: Personnel File Copy: Employee Patient Protection and Affordable Care Act