HomeMy WebLinkAboutResolutions - 2016.03.30 - 22228MISCELLANEOUS RESOLUTION #16045 March 17, 2016
BY: Human Resources Committee, Robert Hoffman, Chairperson
IN RE: HUMAN RESOURCES DEPARTMENT — TEMPORARY OFFER OF MEDICAL COVERAGE
FOR EMPLOYEES TRANSITIONING FROM FULL-TIME ELIGIBLE TO PART-TIME NON-ELIGIBLE
To the Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen;
WHEREAS in accordance with the Federal Affordable Care Act (ACA), Shared Responsibility Provision,
section 4980H of the Internal Revenue Code, the County must track all employee hours during a look-
back measurement period (January 1 through December 31) on an annual basis; and
WHEREAS employees are determined to be full-time employees if they work an average of 30 or more
hours per week (1,560 hours per year) during the look-back measurement period; and
WHEREAS employees deemed to be full-time must be offered medical coverage throughout the following
stability period; and
WHEREAS the County has put measures in place to address this requirement; and
WHEREAS a clarification from the IRS has been issued stating that when a full-time employee terminates
employment and returns as a part-time non-eligible (PTNE) employee within 13 weeks, the ACA requires
that they be offered medical coverage through the remainder of their stability period; and
WHEREAS the ACA requires that the medical plan offered be affordable and provide minimum value; and
WHEREAS the County's current HMO plan is a fully insured medical plan that meets all the ACA
requirements; and
WHEREAS the HMO plan reduces the potential liability for the County in comparison to the self-insured
plans; and
WHEREAS the County Executive recommends offering the HMO medical plan to PTNE employees who
are temporarily eligible for medical coverage in accordance with the Affordable Care Act.
NOW THEREFORE BE IT RESOLVED that the Board of Commissioners' authorizes the County to offer
the HMO medical plan to PTNE employees who qualify under the Federal Affordable Care Act for medical
coverage.
BE IT FURTHER RESOLVED that the County offer the HMO medical plan to this group of PTNE
employees and subsidize the self-only premium using the Federal Poverty Line (FPL) Safe Harbor
amount of $92 per month in employee contributions for 2016, and index the amount according to future
year FPL amounts as adjusted for inflation.
BE IT FURTHER RESOLVED that the two-person and family premiums will be subsidized by the County
at the same dollar amount as self-only coverage, with the remainder of premium being paid by the
employee, and index future amounts according to future year FPL amounts as adjusted for inflation.
Chairperson, on behalf of the Human Resources Committee, I move the adoption of the foregoing
resolution.
HUMAN RESOURCES COMMITTEE VOTE:
Motion carried unanimously on a roll call vote.
COAMAND*
COUNTY MICHIGAN
OAKLAND COUNTY EXECUTIVE L. BROOKS PATTERSON
HUMAN RESOURCES
Jordie Kramer, Director
To: Human Resources Committee
From: Jennifer Hain, Manager - Human Resources
Date: March 9, 2016
Re: New Benefit Requirements Under the Affordable Care Act (ACA) Regarding Full-Time to Part-
Time Non-Eligible Status Changes
The IRS has issued a new clarification to the requirements of the Affordable Care Act (pg. 8,593) that
states full-time eligible employees (FTE) who separate from service and rehire as part-time non-eligible
(PINE) have to be offered temporary medical coverage if they meet two requirements.
First, to qualify for medical coverage, the former FTE employee must be rehired as a PTNE within 13
weeks of termination. Any FTE employee rehired as a PTNE after 13 weeks of absence is considered a
new hire, and the County is not required to offer medical coverage. Second, the employee must have
worked at least 1,560 hours in the Affordable Care Act (ACA) "look-back measurement period" (the
prior calendar year period). If these two requirements are met, the PINE must be offered medical
coverage for the duration of a "stability period." The stability period is generally through the end of
the calendar year, but in some instances an employee might also qualify for an additional 12 months of
coverage in the following calendar year, if they worked more than 1,560 hours during the year they
transitioned from FTE to PINE.
Due to this clarification by the IRS, we recommend that the County begin offering medical coverage to
FTE employees that separate and rehire as PTNE employees within 13 weeks. We are recommending
that these employees be offered the County's HMO plan. This is a fully-insured medical plan that will
mitigate any excessive risk for the County. The HMO plan ensures that the County will not pay more
than the monthly premium if a high dollar claim is incurred, such as a lengthy hospital stay.
In order to meet the ACA affordability test for monthly employee contribution amounts for self-only
coverage, the County must be within the Federal Poverty Line (FPL) Safe Harbor amount ($93.18) or
within 9.5% of household income. We recommend that the County use the Federal Poverty Line (FPL)
Safe Harbor amount because it is the safest and easiest to administer.
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2100 Pontiac Lake Road I County Executive Building 41W I Waterford, MI 48328 I Fax (248) 452-9172 I OakGov.com
In recommending the employee contribution amounts in the chart below, we considered how much
part-time eligible (PTE) employees are paying toward coverage (50% of premium) and what COBRA
people are paying (100% of premium + 2% Administration fee). The chart below shows the current
full-time employee bi-weekly contribution amounts, the full premiums, the recommended rates for
FTE's who separate and return as PTNE, the COBRA costs for employees that separate from service
and elect to continue coverage up to 18 months, and the amounts paid by PTE employees.
Coverage
Level
2016 FTE
Employee
Bi-weekly
Contribution
2016 HAP
HMO
monthly
premium
2016 Recommended 1`
MonthlyCharg '''for. PI NES
2016 HMO
COBRA
Premium
2016 Part-Time Eligible
monthly cost
' ' twee
Cost
'County —
Cost
Employee
Cost
Employee
cost
County
Cost
Self-Only $32.00 $669.44 $92.00'`'., $57744 $682.83 $334.72 $334.72
2-person $65.00 $1,539.72 $962.28 577A4.- $1,570.51 $769.86 $769.86
Family $75.00 $1,740.52 $1,163.08, ,z .$574:44 $1,775.33 $870.26 $870.26
*2016 FPL amount is $93.18 for Self-Only coverage.
For self-only coverage, we recommend the employee pay $92 a month, slightly below the current
Federal Poverty Line amount, and the County pay the remaining portion of the premium ($577.44 in
2016). If the employee elects 2-person or family coverage, we recommend the employee pay the
difference between the self-only County subsidy and the actual premium cost (i.e. employee pays
$962.28 for 2 person coverage and $1,163.08 for family coverage in 2016). The County subsidy
amount will change as the annual Safe Harbor FPL amount changes, and the employee cost will also
change annually as the full premium rates change. The County's requirement to offer affordable,
minimum value medical coverage will be met, even if the employee declines coverage.
Based upon the number of FTE employees in 2015 that separated and rehired as PTNE within 13 weeks
that did not already have retiree health coverage through the County (12 people), we estimate the
annual cost of this new coverage will be approximately $83,000 if all of these PIN Es elect the coverage.
cc: file
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2100 Pontiac Lake Road County Executive Building 41W I Waterford, MI 48328 I Fax (248) 452-9172 I OakGov.com
Resolution #16045 March 17, 2016
The Chairperson referred the resolution to the Finance Committee. There were no objections.
FISCAL NOTE (MISC. #16045) March 30, 2016
BY: Finance Committee, Tom Middleton, Chairperson
IN RE: HUMAN RESOURCES DEPARTMENT — TEMPORARY OFFER OF MEDICAL COVERAGE FOR
EMPLOYEES TRANSITIONING FROM FULL-TIME ELIGIBLE TO PART-TIME NON-ELIGIBLE
To The Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen:
Pursuant to Rule XII-C of this Board, the Finance Committee has reviewed the above referenced
resolution and finds:
1. The IRS has issued a new clarification to the requirements of the Affordable Care Act (ACA)
that requires medical coverage be offered to employees transitioning from Full-Time Eligible
(FTE) to Part-Time Non-Eligible (PINE) employment.
2. Employees that qualify will be offered temporary medical coverage under the Federal ACA
and meet certain other requirements which include returning to PINE status within 13 weeks
of FTE employment termination and worked a required amount of hours during the look-back
measurement period.
3. The ACA requires that the medical plan offered be affordable and provide minimum value
through the remainder of their stability period.
4. The County's current HMO plan is a fully insured medical plan that meets all the ACA
requirements.
5. The County will offer the HMO medical plan to transitioning PTNE employees and subsidize
the self-only premium. Two-person and family premiums will be subsidized by the County at
the same dollar amount as self-only coverage, with the remainder of the premium being paid
by the employee.
6. The estimated annual cost of the new coverage is $83,000 with these costs expected to
being covered by the existing personnel budgets due to turnover favorability.
7. A budget amendment is not required at this time.
FINANCE COMMITTEE
FINANCE COMMITTEE VOTE:
Motion carried unanimously on a roll call vote.
Resolution #16045 March 30, 2016
Moved by Kochenderfer supported by McGillivray the resolutions (with fiscal notes attached) on the
Consent Agenda be adopted (with accompanying reports being accepted).
AYES: Dwyer, Fleming, Gershenson, Gingell, Gosselin, Hoffman, Jackson, Kochenderfer,
KowaII, Long, McGillivray, Middleton, Quarles, Scott, Spisz, Taub, Weipert, Woodward, Bowman,
Crawford. (20)
NAYS: None. (0)
A sufficient majority having voted in favor, the resolutions (with fiscal notes attached) on the Consent
Agenda were adopted (with accompanying reports being accepted).
0Voil 2-(-)16
I HEREIN APPRGVE THIS Rem:xi/nog
CHIEF DEPUTY COUNTY EXECUTIVE
ACTING PURSUANT TO MCL 45.859A (7)
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lisa Brown, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and
accurate copy of a resolution adopted by the Oakland County Board of Commissioners on March 30,
2016, with the original record thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County of Oakland at
Pontiac, Michigan this 30th day of March, 2016.
Lisa Brown, Oakland County