HomeMy WebLinkAboutResolutionRESOLUTION NO. 2013 —
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY
ADOPTING SAFE HARBORS UNDER THE PATIENT PROTECTION
AND AFFORDABLE CARE ACT
WHEREAS, the Patient Protection and Affordable Care Act ("ACA") was enacted
on March 23, 2010; and
WHEREAS, ACA added Section 4980H Shared Responsibility for Employers
Regarding Health Care Coverage to Title 26 of the United States Code, the Internal Revenue
Code (Section 4980H); and
WHEREAS, Section 4980H imposes an assessable payment on an applicable
large employer when (1) it fails to offer "substantially all" of its full-time employees (and their
dependents) the opportunity to enroll in minimum essential coverage or offers coverage to
"substantially all" of its full-time employees (and their dependents) that is "unaffordable" or does
not provide "minimum value" and (2) any full-time employee is certified to the employer as
having received a subsidy for coverage through the exchange ("Assessable Payment"); and
WHEREAS, the City of National City is considered an applicable large employer
because it employed an average of at least 50 full-time employees (including full-time
equivalents) on business days during the preceding calendar year; and
WHEREAS, the Department of Treasury issued proposed regulations regarding
Section 4980H that permit the City to adopt a Look -Back Measurement Method Safe Harbor
("Look Back Safe Harbor") in order to determine the status of an employee as full-time for
purposes of determining and calculating the Assessable Payment (78 Federal Register 218,
243, January 2, 2013); and
WHEREAS, the City intends to adopt the provisions of the Look -Back
Measurement Method Safe Harbor in order to determine the full-time status of employees for
purposes of the Assessable Payment, where Section 4980H defines "full-time" status as "an
employee who is employed on average at least 30 hours of service per week"; and
WHEREAS, the Department of Treasury issued proposed regulations regarding
Section 4980H that permit the City to use one of three affordability safe harbors for any
reasonable category of employees as long as it is applied on a uniform and consistent basis for
all employees in the category (78 Federal Register 218, 251-253, January 2, 2013); and
WHEREAS, the City intends to use the affordability safe harbors as
contemplated in the proposed regulations.
NOW THEREFORE, be it resolved by the City Council for the City of National
City, as follows:
Section 1. The City establishes the Look -Back Measurement Method Safe Harbor
for all ongoing employees as follows:
a. The City establishes a twelve (12) month standard measurement period
for ongoing employees.
Resolution No. 2013 —
September 17, 2013
Page Two
b. The standard measurement period will start each year on December 2
and end the following year on December 1. The initial term will be
December 2, 2013 through December 1, 2014.
c. The standard measurement period is the period during which an ongoing
employee's hours are measured.
d. The City establishes an administrative period of sixty (60) days.
e. The administrative period associated with the standard measurement
period will start each year on December 2 and end on January 31.
f. The City establishes a twelve (12) month stability period for ongoing
employees.
g.
Starting with February 1, 2015, the twelve (12) month stability period for
ongoing employees will start each year on February 1 and end on
January 31.
h. If an ongoing employee's employment status changes before the end of a
stability period, the change in status will not affect the classification of the
employee (as full time or not full time) for the remaining portion of the
stability period.
Section 2. On the start date of a new employee, the City will make a determination
as to whether that new employee is reasonably expected to be a full-time employee. If the new
employee is reasonably expected to be a full-time employee and is not a seasonal employee,
the City will offer minimum essential coverage to that employee within 60 days.
Section 3. If based on the facts and circumstances, on the start date of a new
employee, the City is unable to determine that the employee is reasonably expected to be
employed an average of at least thirty (30) hours per week over the initial measurement period,
then the employee is considered a variable hour employee.
Section 4. The City establishes the Look -Back Safe Harbor for new variable hour
employees as follows:
a. The City establishes a twelve (12) month initial measurement period for
each new employee.
b. The initial measurement period will start the first day of the first calendar
month after the start date, unless the start date is the first of a calendar
month in which case the initial measurement period will start on that date.
c. The administrative period shall start the day following the last day of the
initial measurement period and shall end no later than the last day of the
first calendar month beginning on or after the first anniversary of the
employee's start date.
Resolution No. 2013 —
September 17, 2013
Page Three
d. The City establishes a twelve (12) month stability period associated with
the initial measurement period.
e. If the new variable hour employee does not measure as a full-time
employee during the initial measurement period, the stability period
associated with the initial measurement period must not exceed the
remainder of the standard measurement period (plus any associated
administrative period).
Section 5. A new employee's hours will be measured during the first complete
standard measurement period for which he/she is employed. This means that a new
employee's status may be tested under an initial measurement period and at the same time be
measured under the overlapping standard measurement period.
a. If an employee measures as full-time during the initial measurement
period, he/she will retain full-time status for the entire associated stability
period (even if the employee does not qualify as full-time during the
standard measurement period).
b. If an employee does not measure as full-time during the initial
measurement period, but qualifies as full-time during the standard
measurement period, the employee must be treated as full-time during
the stability period associated with the standard measurement period.
Section 6. When an employee experiences a break in service without providing at
least one hour of service, the employee will retain the status the employee had previously with
respect to any stability period, except that an employee will be treated as a new employee:
a. if the employee resumes employment after a period of at least 26
consecutive weeks with less than an hour of service; or
b. if the employee's period of no service (measured in weeks) is at least four
consecutive weeks long and exceeds the number of weeks of that
employee's period of employment immediately preceding the period of no
service.
Section 7. When an employee takes special unpaid leave (i.e. unpaid leave under
the Family and Medical Leave Act of 1993, unpaid leave under the Uniformed Services
Employment and Reemployment Rights Act of 1994, or unpaid leave on account of jury duty), to
determine hours of service the City will compute the average after excluding any periods of
special unpaid leave during the measurement period and apply that average for the entire
measurement period.
Section 8. For each reasonable category of employees, the City, at its sole
discretion, but on a uniform and consistent basis for all of the employees in a reasonable
category, will apply one of the following safe -harbors to determine the affordability of the
minimum essential coverage that it offers its full-time employees:
Resolution No. 2013 —
September 17, 2013
Page Four
a. Form W-2 Safe Harbor
The City measures whether the employee's required contribution
for the calendar month for the lowest cost self -only coverage that
provides minimum value exceeds 9.5 percent of the Form W-2
wages (as reported in Box 1) for the employee from the employer
for the calendar year in which coverage is offered.
ii. The coverage offered by the City will be deemed affordable if the
employee's contribution is equal to or less than 9.5% of the
employee's Form W-2 wages as reported in Box 1.
b. Rate of Pay Safe Harbor
i. The City measures whether the employee's required contribution
for the calendar month for the lowest cost self -only coverage that
provides minimum value exceeds 9,5 percent of an amount equal
to 130 hours multiplied by the employee's hourly rate of pay as of
the first day of the coverage period.
ii. For salaried employees, the monthly salary amount will be used
instead of 130 multiplied by the hourly rate of pay.
iii. The City may use this safe harbor only if the City does not reduce
the employee's wages (with respect to the employees for whom
the City applies the safe harbor).
iv. If rate of pay increases during the year, the City will use the lowest
rate of pay for the year in the calculation.
v. The coverage offered by the City will be deemed affordable if the
employee's monthly contribution is equal to or less than 9.5
percent of the monthly wage as calculated in (b)(i)-(ii) above.
c. Federal Poverty Line Safe Harbor
The City measures whether the employee's required contribution
for the calendar month for the lowest cost self -only coverage that
provides minimum value exceeds 9.5 percent of a monthly amount
determined as the Federal Poverty Line (FPL) for a single
individual for the applicable calendar year.
ii. The coverage offered by the City will be deemed affordable if the
employee's monthly contribution does not exceed 9.5 percent of
the monthly FPL for a single individual for the applicable calendar
year.
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Resolution No. 2013 —
September 17, 2013
Page Five
PASSED and ADOPTED this 17th day of September, 2013.
Ron Morrison, Mayor
ATTEST:
Michael R. Daila, City Clerk
APPROVED AS TO FORM:
Claudia Gacitua Silva
City Attorney