TEES

Affordable Care Act (ACA)

The ACA (Public Law 111-148) was implemented on March 23, 2010 and is intended to increase access to health care for more Americans. This comprehensive legislation includes many changes that impact the commercial health insurance market, Medicare and Medicaid. ACA is also referred to as the “health reform act” or “Patient Protection and Affordable Care Act” or “Obamacare”.

Key Terms

Full-Time Employee – Under the ACA, an employee working 30 or more hours per week is considered full-time. A new employee who is reasonably expected to work full-time (30+ hours per week) for 90 days or more beginning on his/her hire date, is considered benefit-eligible based on ACA rules.

Variable Hour Employee - A new employee is considered a variable hour employee if, based on the facts and circumstances at the start date, it cannot be determined that the employee is reasonably expected to work on average at least 30 hours per week for 90 days.

Measurement Period -The Measurement Period “or look-back period” is a safe harbor method allowing employers to measure hours worked over a 12-month period by variable-hour employees to determine if these employees should be considered full-time employees, without the employer being subject to a payment under § 4980H for this period.

Stability Period – The period of time a variable-hour employee who worked on average 30 hours/week during the measurement period would be treated as a full-time employee regardless of the number of hours worked by that employee during the stability period, as long as the individual remains an employee. The stability period cannot be less than the measurement period (12 months).

Administrative Period –Provides a period of time for the employer to evaluate benefit-eligibility and for the employee to complete the benefit enrollment process. Usually a one-month period after the measurement period.

Texas A&M System ACA Periods

Existing Employees (Hired on or Before 8/1/2014)

  • Initial Measurement Period for existing employees - 8/1/2014 thru 7/31/2015
  • Initial Administrative Period following Initial Measurement Period – 8/1/15-8/31/15
  • Initial Stability Period – 9/1/15-8/31/16
  • Standard Measurement Period – 8/1/XX-7/31/XX of each subsequent year
  • Standard Administrative Period – 8/1/XX – 8/31/XX of each subsequent year
  • Standard Stability Period – 9/1/XX – 8/31/XX of each subsequent year

 Newly Hired Employees (Hired After 8/1/2014)

  • Initial Measurement Period – 12 month period beginning the date of hire if hired on the first of the month or beginning the first of the month following hire date if hired mid-month.
  • Initial Administrative Period following Initial Measurement Period – full calendar month beginning after the conclusion of the Initial Measurement Period.
  • Initial Stability Period – 12 month period beginning at the conclusion or the Administrative Period following the initial Measurement Period for which benefit eligibility must be extended without regard to actual hours worked.
  • The standard measurement for existing employees will be running in the background and the new hire will transition to the standard measurement period after the initial measurement period has concluded.

Employment Considerations

Texas A&M University System is the common employer because of the umbrella benefit plan; therefore, all hours worked at A&M System Agencies and Institutions are factored into benefit eligibility determination.

Dual employment agreements are critical with departments working together for an awareness of hours worked in each position for employees holding multiple positions.

The measurement period applies to all employees, but only those in variable-hour positions are being reported.  If an employee moves from a budgeted, benefit-eligible position to a variable-hour or non-benefit eligible position, the hours work during the look-back measurement period will be considered for benefit determination.

Breaks in Service

It is important to recognize Texas A&M University System is the overall employer because all System Agencies and Institutions are covered under the same benefit plan. Therefore, previous employment including working at another System Agency or Institution may impact benefit eligibility under the ACA rules.

Rehires

The duration of the break in service between the previous employment and the date of rehire will determine the impact on the current measurement period for the rehired employee.

Length of BreakImpact
Break in service of MORE than 26 weeks Treat as a new hire. Restart and begin new measurement period.
Break in service between 4 – 26 weeks with amount of prior employment GREATER than break in service Continue existing measurement & stability periods, but do not count break against employee (will average by smaller number of months to exclude the break in service)
Break in service between 4 – 26 weeks with amount of prior employment LESS than break in service Treat as new hire - restart and begin new Measurement Period
Break in Service LESS than 4 weeks Continue existing measurement & stability periods. Factor in zero hours during the break
Stability Period

An employee that was in a stability period that is rehired within that same stability period will have benefits immediately reinstated.

Active Employees

Active employees who are in a leave status should not have the following types of leave counted against them during the measurement period. 

  • FMLA Eligible Leave
  • Jury Duty
  • Military Leave
  • Educational Breaks (example summer months)

Instances where the above types of leave apply will have the number of months or weeks used for the average shortened accordingly when calculating the average.  

Employee Specific Information

Implementation of the ACA - a history of specific actions completed for ACA compliance impacting employee benefits:

  • Preventive services covered at 100%
    Extended health coverage to dependents until age 26 regardless of marital status
    Restrictions on over-the-counter reimbursements under the FSA
    Maximum contribution under the Healthcare FSA limited to $2,500
    Required Uniform Coverage Summaries
    Inclusion of benefits value on W2 tax statement
    Co-pays now included in the maximum out-of-pocket calculations
    Required marketplace notifications in response to the individual mandate
  • Dependent social security numbers requested in preparation for IRS tax reporting for form 1095 to be generated with W2 tax forms prepared for 2015 taxes to be send in January 2016
  • Effective September 1, 2015 - Prescription copayments and deductibles are factored into and included in the maximum out-of-pocket calculations for the health plan
  • Effective September 1, 2015 - Employees working 75% effort (30 hours/week) or more will be eligible for full state contribution.
  • Effective September 1, 2015 – Dependent children may remain on health, dental, vision and dependent life plans until age 26, regardless of marital status.

Individual Mandate

“Individual Responsibility Requirement” or “Individual Mandate” began 1/1/2014 requiring everyone to have health insurance or pay a tax penalty (unless you qualify for a hardship exemption) For more information about the Individual Mandate and potential tax penalties, click here.

Filing Taxes

New information required from IRS regarding benefits. As part of the Affordable Care Act, individuals are now required to answer information regarding their health insurance coverage when filing their taxes. The plans offered by the Texas A&M System meet the requirements for minimum essential coverage.

Additional Resources

ACA Questions and Answers
Measurement Period Graphic
ACA Benefit Eligibility Determination Flowchart
Benefit Eligibility Determination
Student Workers and the ACA
HealthCare.gov

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