Sample Employee Communication and Procedures

VEHI Memo

Sample Employee Communication and Procedures:

Employer Shared Responsibility Compliance/Measurement Periods

November, 2014

(For employees that request information on how the district will determine eligibility for coverage, you may provide the following information.)

Certain rules relating to employment-based health coverage have changed under the health care reform.In general, large employers that wish to avoid any potential penalty under health care reform must offer full-time employees group health plan coverage that:

• Meets a minimum value standard, and
• Is considered affordable to the employee as to employee-only coverage.

Under the rules, employees who work 30 or more hours per week are considered full-time for purposes of health plan coverage only. In most cases it is not difficult to determine if an employee will average 30 hours of service per week. However, there are certain employment positions where an employer cannot reasonably make that determination in advance. For example, substitute teaching positions. When an employer cannot reasonably make the determination in advance, there is a special rule that applies to offering health coverage to employees in those positions. Employees in these positions are considered variable hour employees under the health plan eligibility rules. Note that seasonal employees are always considered variable hour employees under this rule.

This special rule allows an employer to defer offering health plan coverage until after an employee has worked for a specific period of time, referred to as a standard look-back measurement period. Under the special rule, the school’s cafeteria plan year determines when its standard look-back measurement period begins.

A newly hired employee considered a variable-hour employee will initiallybe counted for eligibility purposes based on the employee’s date of hire and a special initial measurement period.

This allows the employer to count the average hours of service the employee worked. If the employee averages at least 30 hours of service during thelook-back measurement period the employer must then offer the employee health plan coverage. When using a measurement period, the variable-hour employee’s coverage must be made effective no later than 13 months from the employee’s start date. Once the 12-month look-back period has elapsed and eligibility for coverage has been determined, the waiting period will likely have met;any waiting period runs concurrently with the initial measurement period for a variable-hour employee.

Note: The school has a waiting period of (Insert waiting period).Under BCBVT and VEHI policy, an eligible employee will be enrolled as of the first day of the month following submission of enrollment information to BCBVT. There is no mid-month enrollment.

When health coverage is offered based on a look-back measurement period, the coverage must remain available to the employee for a minimum duration, called a stability period.The employee remains eligible for coverage regardless of the number of weekly hours of service the employee works during the stability period, provided the employee remains employed.

The information on the following pages explains how [SD] will apply this rule for variable hour employees. This change is effective July 1, 2015. When a school must comply is dependent upon its §125 or cafeteria plan year. A school with at least 100 full-time and full-time equivalent employees and a July cafeteria plan year must be prepared to comply with employer shared responsibility by July 1, 2015.

Hours for employees hired into a variable hour position after May 1, 2014are counted in a slightly different way than employees hired on or before May 1, 2014.

1

Measuring Variable Hour Employee Hours of Service:

Employer with 100 or more employees with a JulyCafeteria Plan Year

Ongoing Variable Hour Employees

To determine if avariable hour employee works an average of 30 or more hours per week (and thus eligible for an offer of group health plan coverage) the [SD] establishes an Ongoinglook-back measurement period during which an employee’s hours of service are counted. The Plan Sponsor elects to apply the following periods to determineeligibility:

Look-Back Measurement Period: / [12]-Month Measurement Period (Ongoing) An example of a standard measurement period is May 1, 2014through April 30, 2015for compliance by July 1, 2015
Administrative Period: / An Administrative Period of up to 90 days (Ongoing) (Most employers will utilize a 2-month period to comply with the 90 day limitation). For example, an administrative period from May 1 through June 30 would satisfy the requirement.
Stability Period: / [12]-Month Stability Period (Ongoing) If the above look-back measurement period is used, the first stability period is from July 1, 2015 through June 30, 2016.

Newly Hired Variable Hour Employees

When a new employee is hired into a variable hour employee position, they are not required to wait to complete a full ongoing look-back measurement period. Instead, the employee’s hours of service will be counted during an Initial12 month look-back measurement periodbased on their date of hire.The Plan Sponsor elects to apply the following periods to determine a newly hired employee’s eligibility:

Look-Back Measurement Period: / [12]-Month Initial Measurement Period begins [enter date no later than first day of month following hire date and ends no later than 12 months from the employee’s start date [enter date or description of date]
Administrative Period: / The length of the initial administrative period depends, in part, on the date-of-hire. In general, it cannot exceed a two-month time period and may be less in order to ensure an appropriate offer is made within 13 months of the employee’s start date.
Stability Period: / [12]-Month Initial Stability Period – Immediately follows the end of the Initial Administrative Period
Offer of Coverage / The offer of coverage must be made no later than 13 months from the employee’s start date, plus, if the start date was not the first day of the month, the time remaining until the first day of the next month must be included in the 13 month timeframe.

Example 1:

[SD]has 100 or more employees and a cafeteria plan with a July plan year and must comply with the new health care reform rules effective July 1, 2015. Bob, [enter appropriate position for variable hour employee] hired on or before May 1, 2014,is considered a variable hour employee. To determine if Bob is eligible for group health plan coverage effectiveJuly 1,2015[SD] counts all of Bob’s hours of service beginning [May 1, 2014] through [April30, 2015].

During the plan’s Ongoing Administrative Period beginning May 1, 2015[SD] reviews Bob’s hours of service. If Bob averaged at least 30-hours of service during the look-back measurement period[SD] notifies Bob and provides Bob with the necessary enrollment materials and information about how to apply for coverage. Provided Bob completes the enrollment process in a timely fashion his coverage (and coverage for his dependents, if enrolled) begins onJuly 1,2015. Bob will remain eligible and enrolled in the health plan through at least June 30, 2016(the Ongoing Stability Period) even if Bob does not work 30-hours per week, as long as Bob makes the required contribution for coverage and Bob’s employment does not terminate.

Bob’s continued eligibility for coverage for July 1, 2016 through June 30, 2017is determined based on his average hours worked during the ongoing 12 month look-back measurement period beginning onMay 1, 2015immediately after the end of the prior(2015) Look-back Measurement Period.

The ongoing look back periods set by [SD]begin and end on the same dates each year. While the dates are subject to change by the [SD] in the future, the look-back measurement period will not change during the middle of a measurement period.

Example 2:

The facts are like those in Example 1. Mary,[enter appropriate position for variable hour employee] hired on or before May 1, 2014is considered a variable hour employee. Mary’s hours of service from [May 1, 2014] through [April30, 2015] do NOT average 30 hours per week. During the plan’s Ongoing Administrative Period beginning May 1, 2015[SD] reviewsMary’s hours of service and determines she is not considered a full-time employee. [SD] notifies Mary about her eligibility status. During the Ongoing Stability Period, July 1, 2015 through June 30, 2016 Mary is not eligible for group health plan coverage even if Mary sometimes averages more than 30-hours of service for one or more weeks.

Mary will have opportunity to become eligible for health plan coverage for the period beginning July 1, 2016 because her hours of service are counted based on her average hours worked during the Ongoing look-back measurement period beginning onMay 1, 2015, immediately after the end of the prior (2015) Look-back Measurement Period.

Example 3:

Dianna [enter appropriate position for variable hour employee] is hired on May 10, 2014. Dianna’s initial measurement period runs from May 10, 2014, through May 9, 2015. Following the end of Dianna’s initial measurement period [SD] uses the initial administrative period to count the hours of service Dianna worked during the measurement period. (Dianna’s initial administrative period runs from May 10, 2015 through June 30, 2015.)[SD] determinesDianna worked an average of 30 hours per week during this initial measurement period. [SD]offers affordable coverage to Dianna for a stability period that runs from July 1, 2015(within 13 months of her date of hire)through June 30, 2016.

From Dianna’s start date through June 30, 2016, [SD] is not subject to an employer mandate penalty with respect to Dianna because [SD]complied with the standards for the initial measurement period and stability periods for a new variable hour employee. However, [SD]must test Dianna again based on the period from May 1, 2015 through April30, 2016 (the first standard measurement period that begins after Dianna’s start date) to see if she qualifies to continue coverage beyond the initial stability period.

(For employees that do not meet eligibility for coverage, you may provide the following information.)

Sample Notice of Eligibility Determination

[SD] Group Health Plan
Determination of Eligibility

To: [name & address of variable hour employee]

Date of Notice:

Name of Plan: [SD] Group Health Plan (the "Plan")
Address:
Telephone:
Fax:
Website/Email Address:

This document contains important information that you should retain for your records.

Dear [variable hour employee name]:

Under the Affordable Care Act, an employee who is not reasonably expected to work an average of 30 or more hours per week is not required to be offered employer-sponsored health coverage. However, these employees are entitled to have their average hours of service worked over a [12-month] look-back measurement period to determine potential eligibility for group health plan coverage at a later date. An employee who averages 30 or more hours of service per week during this period is considered eligible for the [SD] group health plan offered to other employees of the same classification. If you think this determination was made in error, you have the right to appeal (this notice includes information about your appeal rights).

This serves as notice of the plan’s determination of your status based on the most recent [initial] or [ongoing] look-back measurement period, [enter period]. We have carefully reviewed all of the hours of service for which you are entitled to credit in making the determination as to whether you are considered full-time based on having worked an average of 30 hours of service during the look-back measurement period. Hours of service that must be included in this determination include:

Note- Employer inserts the appropriate information:

[Hourly (Non-Exempt) Employees]

An employee is entitled to be credited with an hour of service for each hour for which the employee is paid, or entitled to payment by the employer. This includes any period of time during which no duties are performed due to vacation, holiday, illness, disability, layoff, jury duty, military duty or leave of absence, but where the employee is entitled to payment (e.g., vacation time, paid sick leave, paid jury duty time, etc.).

[Salaried (Exempt) Employees – employer chooses one of the following methods, includes the method as part of the notice]

The employee’s actual hours of service from records of hours worked and hours for which payment is made or due.

OR

An employee’s hours of service as determined by using a days-worked equivalency. The employee is credited with eight hours of service for each day for which the employee must be credited with at least one hour of service (hour of service for which payment is made or entitled to payment).

OR

An employee’s hours of service using a weeks-worked equivalency. The employee is credited with 40 hours of service for each week for which the employee must be credited with at least one hour of service (hour of service for which payment is made or entitled to payment).

The [SD] has determined that during the measurement period your average weekly hours of service equaled [enter average hours of service]. This is less than the required average of 30 or more hours of service per week to be determined eligible as a full-time employee. For that reason, you are not eligible for employer-sponsored health coverage at this time. If you remain employed by [SD] and remain in the same position, [SD] will continue to track your average hours for future eligibility. Other than during an employee’s first year of employment, average hours of service are determined during the Ongoing Look-Back Measurement period, [start date] through [end date].

Important Information about Your Appeal Rights

What If I Need Help Understanding This Denial? Contact us (using the contact information provided below) if you need assistance understanding this notice or our decision.

What If I Don't Agree With This Decision? You have a right to appeal the decision.

How Do I File an Appeal? You may appeal this determination to [enter name/title, mailing address and telephone number of the individual to whom the appeal must be made], by filing a request for review under the procedure described below. You must file your request for review within 180 days of the date you receive this Notice. Note that the appeal may be filed by you or someone you name to act for you (your authorized representative). You may write or call [enter name/title] using the contact information above to request a form for Appointment of Authorized Representative.

You must file your appeal by submitting a written request by hand or by first-class mail to:

[Enter name/title,
Organization,
Mailing address and
telephone number
of the individual to whom the appeal must be made]

Can I Provide Additional Information About My Claim? Yes. In connection with your appeal, you may submit written comments, documents, records, evidence, testimony, and other information related to this determination.

Can I Request Copies of Information Relevant to My Claim? Yes, you may request copies (free of charge) by contacting the [Enter name/title, Organization] using the contact information provided above. You can request copies of hours worked information by contacting us using the above information.

What Happens Next? If you appeal, we will review our decision and provide you with a written determination.

Plan Review Procedures

When you file an appeal as described above, [SD] will provide a full and fair review of this determination under the following procedures.

1. The review will take into account all comments, documents, records, evidence, testimony, and other information submitted that relates to your eligibility. The review on appeal will be a "fresh" look at your eligibility without deference to this initial determination. It will be conducted by a person who was not involved in this initial determination and who is not a subordinate of the individual involved in this initial adverse benefit determination.
2. Upon request, and at no charge, you may obtain reasonable access to and copies of all documents, records, and information relevant to your eligibility.

Time Period for Appeal Decisions

The Plan will notify you of the decision on your request for review within a reasonable period of time but not later than 30 days after the Plan receives your request for review.

Please carefully review the above information. If you decide to appeal this determination by requesting a review as described above, your appeal should be sent within the prescribed time period to the person named above. Failure to file a timely appeal will bar you from any further review of this determination under these procedures or in a court of law.

Sincerely,

______

Plan Administrator
For the [SD] Group Health Plan