HomeMy WebLinkAboutResolution 2014-118 N.C.S. 7/21/2014Resolution No. 2014-118 N.C.S.
of the City of Petaluma, California
ADOPTING SAFE HARBORS UNDER THE PATIENT PROTECTION
AND AFFORDABLE CARE ACT AND DELEGATING AUTHORITY
TO THE CITY MANAGER TO IMPLEMENT THE DETAILS OF
THE SAFE HARBORS THROUGH AN ADMINISTRATIVE POLICY
WHEREAS, the Patient Protection and Affordable Care Act (`ACA") was enacted on
March 23, 2010; and,
WHEREAS, ACA added Section 4980 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 larger
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 Rill -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 the City to file with the Internal Revenue Service an
annual return for each full-time employee; and,
WHEREAS, the City of Petaluma ('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 final regulations regarding Section
4980H that permit the City 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 City 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 purposes of
the Assessable Payment and reporting; and,
Resolution No. 2014-118 N.C.S. Page I
WHEREAS, the Department of Treasury issued final 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 (79 Federal Register 8544, 8599-8601, February 12, 2014); and,
WHEREAS, the City intends to use the affordability safe harbors as contemplated in the
final regulations; and,
WHEREAS, the City intends to use good faith efforts to comply with legal requirements
under ACA despite that they have not yet been fully developed; and,
WHEREAS, the City expects that further guidance and regulations may be issued
regarding ACA.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
Petaluma:
1. Establishes the Look Back Measurement Method Safe Harbor with regard to all
employees for the purposes of identifying full-time employees for calculation of the
Assessable Payment and IRS reporting.
2. Does not establish the Look Back Measurement Method Safe Harbor for the purpose
of determining eligiblity for an offer of medical coverage as to any employee. All
represented employees' eligibility for an offer of medical coverage shall continue to
be governed by the terms of any applicable memorandum of understanding or
compensation plan.
3. Delegates authority to the City Manager, including his/her designee(s), to create an
ACA Administrative Policy that establishes standard 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 to
comply with the Look Back Measurement Method Safe Harbor.
4. For each reasonable category of employees, the City 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.
Resolution No. 2014-118 N.C.S. Page 2
5. Delegates authority to the City Manager, including his/her designee(s), to establish
the Administrative Policy to comply with any of the three affordability safe harbors in
accordance with and as permitted by Section 4980H.
6. Delegates authority to the City Manager, including his/her designee(s), to establish
and modify as needed an Administrative Policy to ensure the City's compliance with
Sections 4980I -I and 6056 of the Internal Revenue Code.
Under the power and authority conferred upon this Council by the Charter of said City.
REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the Approved
Council of the City of Petaluma at a Regular meeting on the 21" day of July, 2014, � form:L
by the following vole:
/t
City Attorney U
AYES: Albertson. Barrett, Mayor Glass. Harris. Ileal}', Vice Mayor Kearney, Miller
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST:
Cit}' Clerk or
Resolution No. 2014-118 N.C.S. Page 3