HomeMy WebLinkAbout2013 019 CC RESO RESOLUTION NO. 2013 - 019
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK,
CALIFORNIA,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;
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);
WHEREAS, Section 4980H imposes an assessable payment on an applicable large
employer under the following condition: (1) when the employer 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) when any full-
time employee is certified to the employer as having received a subsidy for coverage through the
exchange ("Assessable Payment");
WHEREAS, Section 4980(H) defines full time equivalents for sole purposes of
determining whether an employer is an applicable large employer when calculating the number
of employees for any month as defined under this act, and such employees shall receive only
those benefits as provided under this act; and
WHEREAS,the City of Baldwin Park ("the City") qualifies as a large employer because
under the ACA because it employed an average of at least 50 full-time equivalent employees on
business days during the preceding calendar year;
WHEREAS,the Department of Treasury issued proposed regulations regarding Section
4980H, that permit the City to adopt the Look Back Measurement Method Safe Harbor("Look
Back Safe Harbor") in order to determine whether an employee qualifies as full-time for
purposes of determining and calculating the Assessable Payment (78 Federal Register 218, 243,
January 2, 2013);
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;
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 Baldwin Park as
follows:
1) That the City finds all of the recitals set forth above are true and correct;
2) The City hereby establishes the Look Back Measurement Method Safe Harbor
with regard to all ongoing employees as follows:
a. The City establishes a twelve (12) month standard measurement period for
ongoing employees.
b. Starting with November 2, 2013, a standard measurement period will start
each year on November 2"d and end the following year on November l".
c. The standard measurement period is be 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 November 2nd and end on December 315`.
f. The City establishes a twelve (12)month stability period for ongoing
employees.
g. Starting with January 1, 2014, the twelve(12)month stability period for
ongoing employees will start each year on January lsc and end on December
31st.
h. For purposes of the 2014 stability period, a transitional measurement period
started on May 1, 2013 and will end on November 1, 2013.
i. The administrative period associated with the transitional measurement period
will start on November 2, 2013 and end on December 31, 2013.
j. 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 or part time) for the remaining portion of the stability
period.
3) 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 before the end of the employee's initial 60 days of employment.
4) If,based on the facts and circumstances at 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 of service per week over the
initial measurement period, then the employee is considered a variable hour
employee.
5) The City establishes the Look Back Measurement Method Safe Harbor with
regard to 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.
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).
6) 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 (even if that means coverage must be
offered before the end of the stability period associated with the initial
measurement period).
7) When an employee experiences a break in service in which not one hour of
service is rendered, upon return,the employee will retain the status the employee
previously had with respect to any stability period, except that the 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 period (measured in weeks) during which no services are performed is
at least four consecutive weeks long and exceeds the number of weeks of that
employees period of employment immediately preceding the period during
which the employee was not credited with any hours of service.
8) 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.
9) 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 value coverage that it offers its full-time employees:
a. Form W-2 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 the 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.
c. Federal Poverty Line 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 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.
PASSED,APPROVED AND ADOPTED this 19`h day of June 2013.
MAN LOZANO
MAYOR
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES ss.
CITY OF BALDWIN PARK
I, Alejandra Avila, City Clerk of the City of Baldwin Park, do hereby certify that the
foregoing Resolution was duly and regularly approved and adopted by the City Council of the
City of Baldwin Park at its regular meeting of June 19, 2013 by the following vote:
Marlen Garcia, Mayor Pro Tern Monica Garcia,
AYES: COUNCILMEMBERS: Mayor Manuel Lozano, Ricardo Pacheco, Susan Rubio
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
ABSTAIN: COUNCILMEMBERS:
1
Alejandra Avila
CITY CLERK