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HomeMy WebLinkAbout10. ACA Update/o. i Central Contra Costa Sanitary District August 10, 2015 TO: ADMINISTRATION COMMITTEE VIA: ROGER S. BAILEY, GENERAL MANAGER ANN SASAKI, DEPUTY GENERAL MANAGER FROM: TEJI OWALLEY, HUMAN RESOURCES MANAGER SUBJECT: AFFORDABLE CARE ACT (ACA) UPDATE This memo is to provide an overview of the ACA, which was enacted into legislation in 2010, and its impact, current and future, to the District. The District is currently conducting a Request for Proposal (RFP) for benefits broker services. Once the District awards an agreement for these professional services, staff will consult with the appointed broker to conduct an audit to ensure the District's compliance with the ACA and to develop benefit strategies in regards to the ACA going forward. HISTORY AND OVERVIEW The ACA was enacted with many provisions being phased in over an eight -year period. The table below reflects an overview of the changes for large businesses (more than 51 employees) in 2010 through 2018: Provisions Effective 2010 • Dependent coverage increased up to age 26 • Early Retiree (under age 65) Reinsurance Program: Reimbursements to employers who cover early retirees • Nondiscrimination: Employers cannot have different eligibility periods, different contribution amounts, or more generous benefits packages for management employees • Inclusion of preventive services at no cost to consumer • No rescission of benefits • No lifetime and annual dollar limits on essential health benefits • Access to emergency services Central Contra Costa Sanitary District Affordable Care Act Update Page 2 of 3 Provisions Effective 2011 • Medical Benefit Ratio: Insurers must spend between 80 to 85% of premium dollars on medical care and services Provisions Effective 2012 • Summary of Benefits and Coverage (SBC): All employers must provide employees with clear and concise SBC's for any health plans • Patient - Centered Outcomes Research Institute (PCORI) fee - insurers charged an annual fee through 2019 to fund medical research • Inclusion of women's preventive services at no cost to the consumer Provisions Effective 2013 • Flexible Spending Accounts: Annual limit decreased to $2,500 • W -2 Reporting: Cost of benefits must be reported on all W -2's • Exchange Notice: Employer must provide employees notice of healthcare exchange by October 1, 2013 Provisions Effective 2014 • Open Enrollment for Health Care Exchange ( "Covered California ") begins in October 2013 for coverage effective January 2014 Provisions Effective 2015 • Employer Shared Responsibility: IRS levies penalties against employers who 1) do not offer coverage to 70 percent of their employees (working more than an average of 30 hours a week in any given month) and 2) do not offer coverage which is considered affordable • Collect 2015 data for Applicable Large Employers (ALE) reporting: IRS requires ALE's to identify their full -time employees in order to report on whether they offer these employees coverage that is affordable and provides minimum value (Section 6056 reporting) in 2016 Central Contra Costa Sanitary District Affordable Care Act Update Page 3 of 3 Provisions Effective 2016 Employer Shared Responsibility: IRS levies penalties against employers who 1) do not offer coverage to substantially all (95 percent) of their employees (working more than an average of 30 hours a week in any given month) and 2) do not offer coverage which is considered affordable Applicable Large Employers (ALE) reporting: IRS requires ALE's to identify their full -time employees and report on whether they offer these employees coverage that is affordable and provides minimum value (Section 6056 reporting) Provisions Effective 2018 • Excise tax on high cost ( "Cadillac ") insurance plans: Insurers subject to a 40% excise tax on any employer- sponsored group health plan with costs that exceed a predetermined level. Thresholds will be updated for 2018 when final regulations are issued and thereafter indexed for inflation in future years Staff will be available at the Committee meeting to answer any questions.