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A multi-campus work group reviewing the implementation of the Patient Protection and Affordable Care Act (“PPACA”) has determined that the University must discontinue certain practices to facilitate the University’s compliance with its obligations under the PPACA. These changes will impact your unit’s ability to utilize lump sum and one-time payments under certain circumstances. As of January 2015, all pay for service arrangements must have hours worked per week associated with the payment to assist the University in meeting its federal reporting requirements under the PPACA.
What is changed?
We have determined that the use of lump sum jobs and one-time payments poses an obstacle to the University’s implementation of the PPACA. Consequently, campus units must now use an alternative method of payment, such as an appropriate hourly job where the employee enters his/her time or a short-term, low-FTE job that reflects the hours worked per week.
There is NO change in an employee’s eligibility to provide additional service that may have previously been paid via lump sum, but rather we are requiring a change in how that additional service is compensated.
Scenarios covered by this change include:
The “one-time payment” option may not be used when paying for services rendered as an employee.
An employee may not be paid solely via a “lump sum” as their only job or form of payment.
An Academic or Civil Service (40 hour/week) employee who has a total FTE less than 75% may not receive a lump sum payment.
A Civil Service (37.5 hour/week) employee who has a total FTE less than 80% may not receive a lump sum payment.
A Graduate Assistant (TA, RA, GA, PGA) who has a total FTE less than 75% may not receive a lump sum payment.
An hourly paid employee, including extra help, undergraduate hourly, graduate hourly, and hourly faculty/clinical/research, may not receive a lump sum payment.
Where a lump sum payment is no longer permitted, campus units must implement either an additional hourly job(s) or FTE appointment(s) in accordance with applicable campus policies and/or procedures.
With this change, lump sum payments are permitted only when the employee already has a regular appointment that is (a) 37.5 hours/week with an FTE equal to or greater than 80%, or (b) 40 hours/week with an FTE equal to or greater than 75%.
Employees, who receive payment for Service Plans, as established in the respective College bylaws, may continue to receive lump sum payments. However, we continue to review the appropriate method to track/calculate hours for these lump sum payments.
The PPACA requires the University to provide an annual report to the IRS regarding insurance coverage offered to all employees who qualify as full-time employees under the PPACA based on the number of hours worked. Lump sum and one-time payments create difficulty in meeting those reporting requirements because Banner does not attribute hours to these payments.
A multi-campus work group has extensively explored several options to address these challenges, including implementing a new system to track employee service hours associated with these types of appointments. After a thorough analysis of the complexity, expense, and workload concerns of adding another system, the work group recommended the approach outlined above.
Other universities have followed a similar approach to address their obligations in implementing the PPACA. Several peer universities have eliminated the use of lump sum payments in all situations. Our multi-campus work group recognized that many lump sum appointments do not pose the same challenge with respect to the University’s implementation of the PPACA. However, the types of lump sum and one-time payments set forth above that do not allow for tracking of service hours expose the University to significant risk in meeting its obligations under the PPACA. For these reasons, the work group determined that policy changes were necessary so that the University pays employees using a process that provides for tracking of work hours and facilitates compliance with the PPACA.
For assistance with this transition, please contact Jack McEnery, Director HR Shared Services (312-996-3581) email@example.com
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