Vote: adopted

Item Text

36. EMPLOYER SHARED RESPONSIBILITY PROVISIONS UNDER SECTION 4980H OF THE INTERNAL REVENUE CODE 1) Approve the following time periods for compliance with regulations on the Employer Shared Responsibility provisions under section 4980H of the Internal Revenue Code: a) For the “annual” look-back period related to service hours to determine full time status of an employee, the “measurement period” will start on April 1st and end on March 31st of the following calendar year; the “administrative period” will start on April 1st and end on June 30th of the same year; and the “stability period” will start on July 1st and end on June 30th of the following calendar year. b) For the monthly “initial” look-back periods for new employees related to service hours to determine full time status, the “measurement period” will start on the first day of the month following hire date and end on the last day of the twelfth full month following hire date; the “administrative period” will start on first day following the end of the “measurement period” and end on the last day of the same month; and the “stability period” will start on the first day of the month following the “administrative period” and end on the last day of the twelfth full month. 2) Approve the assignment of any Employer Shared Responsibility Payment determined to be owed by the IRS, and resulting from employees being classified incorrectly for benefit eligibility purposes, to the departments failing to follow the rules for benefit eligibility prescribed by the Patient Protection and Affordable Care Act. The Maricopa County Benefits Plan document provides that County and Judicial Branch employees are eligible for County-sponsored medical benefits if they are a regular employee employed to work 19 or more hours per week. The 2016-17 medical benefit premiums adopted by the Board of Supervisors provide for two sets of employee rates, one for employees who work 30 or more hours per week and one for employees who work at least 19 hours per week but less than 30 hours per week. Employees hired in temporary status are not offered County medical benefits, even if they are hired to work 30 or more hours per week because by virtue of their temporary status, it is anticipated that the duration of their employment will be less than a year. The Patient Protection and Affordable Care Act (“ACA”) requires Maricopa County and other large employers to make Employer Shared Responsibility Payments for each employee who works 30 hours per week or more during the look-back period, was not offered employer-sponsored medical benefits that are affordable and provide minimum essential coverage, and who subsequently enroll in a medical insurance plan through the Federal marketplace and receive a Federal premium tax credit. The County is required to retrospectively evaluate the hours worked by employees who were not offered medical benefits and determine if any of them actually work an average of 30 hours per week or more and thus trigger the Employee Shared Responsibility requirements. The Federal law allows affected employers to define the amount of time they use for the “look back” period to evaluate employee hours worked. The purpose of this agenda item is to request Board of Supervisors’ approval for the time periods to be used to comply with the Federal law and budgetary responsibility for any Employer Shared Responsibility Payment imposed by the IRS. Effective 7/1/2015 the County will use a look-back measurement method to determine whether an employee is a full-time employee for purposes of coverage under the Maricopa County Benefits Plan. The look-back measurement method is based on Internal Revenue Service (IRS) final regulations under the ACA. The look-back measurement method applies to all County employees. The look-back measurement method involves three different periods: • A measurement period for counting an employee’s hours of service (also called a standard measurement period or an initial measurement period under the regulations); • An administrative period that allows time for Plan enrollment and disenrollment; and • A stability period when the employee is either treated as full-time or non-full-time for Plan eligibility purposes and is covered for benefits (or waived). If an ongoing employee was employed, on average, for at least 30 hours of service per week during the measurement period, the employee is treated as a full-time employee for a set period into the future, known as the stability period. If employees working at least 30 hours of service per week and their dependents are not offered health coverage that provides a minimum level of coverage, the County may be subject to an Employer Shared Responsibility Payment under the IRS regulations for employees that receive a premium tax credit from the federal government for other health care coverage. Departments must accurately classify part-time employees (working less than 30 hours per week) and temporary employees. Employees classified as part-time or temporary that nonetheless work in excess of 30 hours per week for a period of a year may subject the County to an Employer Shared Responsibility Payment. (C-39-16-023-2-00)