HomeMy WebLinkAbout109-2015RESOLUTION NO. 109-2015
ADOPTING SAFE HARBORS UNDER THE PATIENT PROTECTION AND
AFFORDABLE CARE ACT
WHEREAS, the Patient Protection and Affordable Care Act (the "ACA") was enacted
on March 23, 2010; and
WHEREAS, the ACA added Section 4980H Shared Responsibility for Employers
Regarding Health Care Coverage (Section 4980H) and Section 6056 Certain Employers
Required to Report on Health Insurance Coverage (Section 6056) to Title 26 of the
United States Code, the Internal Revenue Code; 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), but
that coverage is either "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, Section 6056 requires an applicable large employer to file with the Internal
Revenue Service an annual return for each full-time employee; and
WHEREAS, the Town of Danville (the "Town") 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 final regulations regarding Section
4980H that permit the Town to adopt the Look Back Measurement Method Safe Harbor
in order to determine the status of an employee as "full-time" for purposes of reporting
and calculating the Assessable Payment, if any (79 Federal Register 8544, 8586, February
12, 2014); and
WHEREAS, the Town intends to adopt the provisions of the Look Back Measurement
Method Safe Harbor in order to determine the full-time status of its employees for
reporting purposes and for purposes of the Assessable Payment; and
WHEREAS, the Department of Treasury issued final regulations regarding Section
4980H that permit the Town to use one of three affordability safe harbors for any
reasonable category of employees as long as the safe harbor is applied on a uniform and
consistent basis for all employees in the category (79 Federal Register 8544, 8599-8601,
February 12, 2014); and
WHEREAS, the Town intends to use the affordability safe harbors as contemplated in
the final regulations; and
WHEREAS, the Town intends to use good faith efforts to comply with legal
requirements under the ACA despite the fact that they have not yet been fully
developed; and
WHEREAS, the Town expects that further guidance and regulations may be issued
regarding the ACA; now, therefore, be it
RESOLVED, by the Danville Town Council that:
1. The Town hereby establishes the Look Back Measurement Method Safe
Harbor with regard to all employees for the purpose of identifying full-time employees
for calculation of the Assessable Payment and for IRS reporting purposes.
2. The Town is establishing the Look Back Measurement Method Safe
Harbor for the purpose of determining eligibility for an offer of medical coverage for
any employee.
3. The Town hereby delegates authority to the Human Resources Manager
and the Finance Manager/ Treasurer, including their designee(s), to create the Look
Back Safe Harbor Guidelines that establishes measurement, administrative and stability
periods, governs the measurement and tracking of employees' hours of service, and/or
otherwise establishes procedures in accordance with Section 4980H.
4. For each reasonable category of employees, the Town in its sole discretion,
but on a uniform and consistent basis for all of the employees in a reasonable category,
will apply one of the three affordability safe -harbors (i.e. Form W-2 Safe Harbor, Rate of
Pay Safe Harbor, or Federal Poverty Line Safe Harbor) to determine the affordability of
the minimum value coverage that it offers its full-time employees.
5. The Town hereby delegates authority to the Human Resources Manager
and Finance Manager/ Treasurer, including their designee(s), to establish Guidelines to
comply with any of the three affordability safe harbors in accordance with and as
permitted by Section 4980H.
6. The Town hereby delegates authority to the Human Resources Manager
and Finance Manager/Treasurer, including his or her designee(s), shall have authority
PAGE 2 OF RESOLUTION NO. 109-2015
to create, modify or amend the look Back Safe Harbor Guidelines to ensure the Town's
compliance with Sections 4980H and 6056 of the Internal Revenue Code.
APPROVED by the Danville Town Council at a regular meeting on December 15, 2015
by the following vote:
AYES: Stepper, Morgan, Arnerich, Doyle, Storer
NOES: None
ABSTAINED: None
ABSENT: None
APPROVED AS TO FORM:
CITY ATTORNEY
S2
AY
ATTEST:
CITY CLE
PAGE 3 OF RESOLUTION NO. 109-2015