Understanding the Affordable Care Act and Hours of Service Processing

In response to the Affordable Care Act (ACA) Employer Shared Responsibility provisions, Oracle has delivered enhancements that will assist customers in determining the employees to be considered full-time under ACA Hours of Service provisions. Under ACA provisions, employees who meet the hours of service threshold should be considered full-time and therefore eligible to receive an offer of health coverage.

On February 10, 2014, the Internal Revenue Service (IRS) and the Department of the Treasury issued final regulations under section 4980H of the Internal Revenue Code with respect to the shared responsibility for employers regarding health coverage of employees. These regulations affect employers referred to as Applicable Large Employers (ALEs).

An ALE is an employer that employs 50 or more full-time employees, including full-time equivalent (FTE) employees during a year. Under section 4980H, an ALE who for a calendar month fails to offer to its full-time employees the opportunity to enroll in minimum essential coverage (MEC) under an eligible employer-sponsored plan may be subject to an assessable payment if a full-time employee enrolls for that month in a qualified health plan for which the employee receives a premium tax credit.

To assist with the identification of an employer's full-time employees for determining any potential liability under section 4980H, the Oracle JD Edwards EnterpriseOne system provides an Hours of Service eligibility process that can be used to calculate an employee's average hours of service for a particular measurement period. The features include:

• An ACA Hours of Service workbench for establishing processing versions and parameters, such as the measurement method and dates.

• Reporting of employee hours of service for the measurement period defined and calculation of the average hours of service per week and for the monthly equivalent.

• The ability to create employee eligibility status records with the ACA Eligibility Status designation.

• An audit history of the input parameters and the results from the Hours of Service report and the ability to inquire into the audit history for further review.

• The ability to incorporate the employee ACA Eligibility Status into benefits eligibility criteria to establish eligibility for enrollment.

Note: The Hours of Service Reporting feature provides functionality for counting actual hours of service from historical timecards in the system over a specified period that lies within a single measurement period start and end date and calculating the average hours of service for that period of time. The Affordable Care Act Hours of Service rules provide additional guidance for specific employment scenarios or types of employees. The JD Edwards Hours of Service feature does not necessarily address all these various scenarios, and employers may need to do additional evaluation or incorporate alternative methods for determining hours of service for certain employees, such as employees who are new variable hours or seasonal employees, employees in certain industries or sectors such as education or transportation, or employees who have been rehired or have had breaks in employment during the year.

Note: Due to the complexity of the ACA legislation, and that by nature many of the provisions do not directly affect Oracle JD Edwards applications, it is expected that the employer will be responsible for many of the requirements of the ACA provisions, such as determining whether health coverage is affordable or if it provides minimum essential coverage.