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Are You Ready for Health Care Reform?

Now that Health Care Reform is here to stay, employers are tasked with looking ahead to the looming requirements and deadlines of the Affordable Care Act (ACA). An integrated Human Capital Management solution one that automates payroll, time and labor management, HR, benefits and talent management partnered with a strong service experience and best practices and compliance support, is integral to complying, reporting and efficiently administering plans under the ACA. ADP Workforce Now (WFN) Comprehensive Services spans the entire employee life cycle from recruitment to retirement. Through our Benefits Administration Service, employers gain access to a team of knowledgeable and responsive experts, the industrys most powerful online tools, and robust employee and manager support all accessible via a primary point of contact a Relationship Manager.

Dependent Coverage
Employers must expand coverage for qualifying dependent children up to age 26. Validate dependent eligibility during enrollment and life events1 Configure the WFN platform to apply the age rules where applicable Research state regulations related to dependent age limits and ensure coverage based on those limits Offer full open enrollment support and benefits invoice reconciliation to ensure accurate coverage and invoices Provide benefit plan setup template to track dependent age requirements Reduces costs associated with ineligible plan participants Reduces premium overpayments Mitigates the administrative complexity of validating 50 state-specific coverage requirements Helps ensure compliance with coverage regulations

Medical Loss Ratio (MLR) Rebates

Employers must distribute MLR rebate dollars to all employees/former employees who were plan participants for that plan year, or spend the rebate on improving effectiveness of their health and welfare programs.

How ADP Can Help

Current

How ADP Can Help

How Your Business Benefits

Assist in calculating rebate distribution to eligible employees as a percentage of plan contribution Answer questions from employees and managers regarding rebates handled as an ADP payroll credit Offer consultative support to client practitioners on alternate use of rebates (i.e., wellness programs)

How Your Business Benefits

Helps reduce administrative burden of rebate distribution calculations Increases employee satisfaction and engagement with timely and detailed answers Helps optimize rebate dollars most effectively to reduce total cost of healthcare

Summary of Benefits and Coverage (SBC)

Insurers and self-insured group health plans must provide SBCs for annual enrollments beginning on or after 9/23/12 and for other enrollments and upon request for plan years beginning on or after 9/23/12.

How ADP Can Help

Assist clients with SBC communication & distribution strategy during open enrollment, life events, or new hire events Distribute SBCs during open enrollment and upon request through Employee Self Service (ESS) and print fulfillment1,2 Answer SBC-related questions from employees WFN technology supports delivery of SBC electronically as well as obtaining acknowledgement from employee. Client can also print hard copy

How Your Business Benefits

Aids compliance with SBC requirements Helps reduce administrative burden of communicating SBCs to employees Empowers employees with access to coverage-related information

1 Optional add-on service 2 Postage and handling charges apply

HR. Payroll. Benefits.

1/1/2013

Medicare Tax on Wages and Unearned Income

2013

Medicare tax on wages increases by 0.9%; new 3.8% Medicare tax imposed on unearned income. Applies to those earning $200,000 if filing single, $250,000 if married filing jointly, and $125,000 if married filing separately.

How ADP Can Help

Conduct analysis of payroll and deductions for high-income employees who may meet criteria for the new taxes, and share with client practitioners

How Your Business Benefits

Increases employee satisfaction with highly compensated/executive associates on planning their taxes

1/31/2013

Form W-2 Reporting

Employers with 250+ W-2s in calendar year 2011 must include value of group health coverage provided to employees on Form W-2 beginning in 2012 tax year. Employers must also confirm payroll system is set up to track and include this figure on W-2s when printed in January. One entry will show total costs for BOTH employee and employer.

1/1/2013

Flexible Spending Account (FSA) Annual Limit

For plan years beginning on or after 1/1/2013, $2,500 limit applies to employee healthcare FSA contributions.

How ADP Can Help

How ADP Can Help

Answer W-2 inquiries from employees, managers and practitioners on premiums paid/reported and explanations on employer and employee contributions Proactively reach out to clients to confirm W-2 updates3 Aids compliance with W-2 requirements Helps reduce risk of penalties for incorrect W-2s (i.e., $50 per) Helps reduce client practitioners administrative burden of year-end payroll processing and validation Engages your most important asset your people via access to Employee & HR Service Center

How Your Business Benefits

Consult with client administrators to increase employee participation in pre-tax savings plans and maximize your benefits investment Deliver communications on new limits and answer inquiries from employees, managers and HR practitioners Provide one-stop shop for all ADP healthcare spending accounts for 2013 open enrollment (FSA, HSA, HRA, etc.), including single debit card and mobile access

How Your Business Benefits

Aids compliance with FSA requirements Helps reduce administrative burden of communicating FSA limits to employees Boosts employee engagement by improving communication and increasing participation Helps reduce benefits costs via consumer-driven or high-deductible health plans, while consolidating multiple spending accounts vendors

3 Employer must determine whether there are any benefits costs that should be reported on the W-2 that are not captured within HRB/WFN and report to ADP payroll for inclusion in the W-2.

3/1/2013

Employee Notice of Exchange

Employers must provide current employees with notice describing availability of exchange coverage. Notice must be provided upon hire for employees hired after 3/1/2013.

How ADP Can Help

How Your Business Benefits

Hard copy communications/notices to new hires, if requested4, as part of on-boarding process describing the availability of exchange coverage Answer inquiries from employees, managers and HR practitioners WFN technology has updated frameworks for information and forms

Aids compliance with exchange notice requirements Helps reduce administrative burden of communicating exchange option to employees Empowers employees with access to Employee & HR Service Center

2013/2014 (Pending guidance may impact effective date and type of services)

2013 2014

Automatic Enrollment and Non-Discrimination Rule

Employers with 200+ full-time employees must automatically enroll new employees in employers group health plan. Insured employer group health plans may not discriminate in favor of highly compensated employees.

How ADP Can Help

Automatically enroll new hires into employer Aids compliance with automatic group health plans enrollment and non-discrimination Report exceptions on enrolled employee population requirements

How Your Business Benefits

4 Postage/print/fulfillment fees apply

1/1/2014

Annual Dollar Limits and Waiting Periods/ Pre-Existing Condition Exclusions

For plan years beginning on or after 1/1/2014, employer group health plans may not impose annual dollar limits on essential health benefits, waiting periods of longer than 90 days, or pre-existing condition exclusions.

1/1/2014

Employer Shared Responsibility

Employers with 50+ FTEs and/or equivalents, must offer affordable, minimum essential coverage or be subject to tax penalties. Options include: Offer traditional group health plan coverage for all employees, with minimum essential coverage (60%+ of actuarial value), while employee costs are capped (9 % of household income) Offering no medical coverage Offering medical coverage for some but not all employees

2014

How ADP Can Help

Provide leaves administration services to help manage absences and benefits eligibility5 Provide new hire reports (up to 90 days) to validate employment status (part/full-time, on leave of absence) and change triggers to ensure appropriate benefits enrollment Provide guidance and education to employers regarding new requirements

How ADP Can Help

Conduct analysis of employees purchasing benefits from employer to see if costs exceed 9 % of W-2 wages and make recommendations on benefit thresholds relative to wage trending Quarterly reconciliation of projected W-2 data against benefit contributions to validate the 9 % thresholds to allow clients to make any changes to wage/bonus before year-end to minimize penalties Assist with annual reconciliation of the penalty bill against benefits and W-2 data, enabling client to request W-2 corrections, or initiate penalty appeals process6 Helps mitigate risk related to cost of benefits and employee burden levels Aids compliance regardless of company size Helps reduce practitioners administrative burden in determining wage levels

How Your Business Benefits

How Your Business Benefits

Helps mitigate excessive costs based on employment status Aids compliance with FLSA rules

1/1/2014

Wellness Incentives
For plan years beginning on or after 1/1/2014, permitted wellness incentives increase from 20% of cost of coverage to 30%. Provide access to a wellness portal and biometric screening Offer consultative support and best practices on wellness programs, plus administrator support Reduces employer costs of healthcare, improves employee engagement and accountability for healthcare costs Gains access to wellness best practices and business case templates for investment
5 Optional add-on service 6 Subject to employee line item data availability in penalty bill

Managing Shared Responsibility Requirements Will Need an Integrated Approach to Workforce Planning and Administration

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For more information, please go to: ADP.com or call 1-800-CALL-ADP

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