This blog post was authored by Heather DeBlanc
On May 2, 2013, CalPERS released a new employer bulletin addressing “Employer Shared Responsibility Regarding Health Coverage.” CalPERS Circular Letter #600-016-13 summarizes existing Affordable Care Act (“ACA”) requirements and their impact on CalPERS contracting agencies. Among other things, the Circular Letter #600-016-13 addresses the following topics:
Assessable Payment – The Circular reminds large employers (those with 50 or more full-time or full-time equivalent employees) that they will be subject to a penalty if they do not offer affordable health coverage that provides minimum value to their full-time employees and their dependent children.
Affordability – A plan is affordable if the employee’s contribution to the lowest cost self-only plan is less than 9.5% of the employee’s household income. The Circular reminds employers that, because public agency employers often offer different employee premium contribution amounts based on bargaining group resolutions and other factors, agencies will need to assess the impact of the affordability requirement using their agency’s specific contribution levels.
Adoption of the “Look-Back Measurement Period” Safe Harbor – If an employer does not adopt this safe harbor, the IRS will assess penalties on a monthly basis based on those employees who are considered “full-time” for any given month. An employer who adopts this safe harbor can determine an employee’s status as a full-time employee by looking back at the employee’s average hours during a measurement period, and rely on that determination without IRS penalties during the corresponding stability period. The periods under this safe harbor have specific legal restrictions as to their timing and length.
An Employee Qualifying As Full-Time Pursuant to a Measurement Period Is Eligible To Enroll Outside of an Enrollment Period – The Circular answers an important question by confirming that new or ongoing variable-hour employees determined to be working full-time under ACA will be eligible to enroll in a CalPERS plan, even if the employee becomes eligible outside a regular open enrollment period. The Circular states that “CalPERS considers employees meeting health benefit eligibility requirements over the measurement period a permitting event outside of open enrollment.”
60 Day Waiting Period – The Circular reminds employers that, independent of ACA, new full-time employees, as well as variable-hour employees determined to be working full-time under ACA, are eligible for the CalPERS health benefits program in accordance with California Code of Regulations Section 599.502(b)(3). Initial enrollment must occur within 60 days of an employee’s eligibility for health benefits. NOTE: this is more stringent than ACA’s prohibition on waiting periods in excess of 90 days.
Additional Information – additional information and resources can be found on the CalPERS Employer web site under Health FAQs.