The Affordable Care Act: Making Sense of District Dollars

Meeting Patient Protection Affordable Care Act (PPACA) requirements is challenging for most school districts because managing and monitoring eligibility requires ready access to date-driven information.

district-affordable-careIt also must meet complicated requirements because the process is still being defined. Managing and complying are time-consuming tasks; yet, they can be accomplished if you compile and maintain your data on software that allows you to identify and monitor personnel activities.

While there are significant penalties for non-compliance, there are enormous costs associated with paying for PPACA – both for coverage and for ultimate penalties if requirements are not met. While the penalty phase is delayed, the law is not.

As districts fully realize by now, those with 50 Full-Time Equivalent (FTE) employees or more must provide affordable care plans for those who are eligible employees. If the plans are not offered, or not affordable, employers face substantial penalties from the IRS. The penalty deferral gives you time to get to ready for activities such as:

  • Tracking  and monitoring the activities of full-time equivalents (FTEs)
  • Calculating employee hours to determine and manage eligibility
  • Maintaining measurements periods for different types of employees
  • Ensuring that you have data that is readily accessible and that data is date-driven to enable reporting to meet regulations
  • Calculating the projected annual income of employees to determine affordability

Educators can connect and follow the conversation on Twitter with the hashtag #eSNBestPractices.

(Next Page: The importance of position control in PPACA management and monitoring)

The first task facing school districts is to confirm hours worked for every classification of employee. Whether an employee is salaried, hourly, works as a substitute, or on extra duty, the district must be able to capture reported time and paid time absences as hours worked for any date-driven time frame. If your district office is resource-limited, the time to assemble this information will detract from other essential district duties.

Complicating the task is the need to correlate hours to salaries because some employees are hired with a fixed salary amount, but not hours. Employee work years may vary between 10 and 12 months. Employees may also get additional pay for extra work such as coaching.

Assessing software to track this information should include the requirement that it tracks all hours and time, in a date driven manner, by FTE. This means all time allocated to extra duties or assignments must be tracked.

This is especially true for those districts that want to limit work hours to less than 30 hours per week. Keeping track of hours worked for eligibility means that districts must be able to “flag” those employees who are on the cusp of eligibility, ensuring that average hours worked over a measurement period are managed accurately and appropriately for cost-effective results.

For a number of school district employees, this will likely mean that those extra hours relied on to supplement their income will no longer be available; it will definitely mean that districts must be able to pull up the data by date, position, and/or employee to manage effectively.

The Importance of Position Control in PPACA Management and Monitoring

When a district has a strong position control system, it can track and control the hours worked by regularly employed staff. This assists districts in managing employee hours for multiple jobs within a school district.  Districts also need to look for software systems where they can limit the hours worked by an employee. This is especially true of hourly employees whose hours vary from week to week.

Keep in mind that eligibility for insurance under PPACA can be affected by how positions are set up, including whether or not workweeks are defined for various employee groups.

Review your set-up:

  • Do you have any stipends that are not accounted for in hours? If so, you may have to manually add these or eventually convert these to extra duty agreements.
  • Are you able to determine and manage eligibility? This would include features that can limit the number of extra hours someone works.
  • How do you track employees within the system to see if they initially qualify for health insurance under the act?
  • How will you notify employees of their eligibility?
  • Do you have data and recommendations regarding the length and timing of the Measurement Period for employee groups plus any recommendations to minimize the financial impact of the act on the district? This would include running scenarios for 3, 6, and 9 month eligibility periods plus running scenarios for different beginning and starting points.
  • Do you have a complete automated (date-driven) list of all employees, their jobs, total hours and average number of hours worked?

Once you make a determination that someone is eligible for the next Stability Period record eligibility, think about creating an insurance code such as DC (declined coverage). This will allows you to go back to any year and print out everyone who was eligible as well as those who declined coverage – saving you duplicate entries.

Some employees may be “on the “fence” or close to 30 hours per week. One strategy would be to use work agreements to limit the number of hours worked for a specific period of time.

All of this can be much more manageable if your software is date-driven. This allows you to pick different beginning and end points to determine which measurement period would be most advantageous for your district.

To make sure you meet the affordability requirements, run the various safe harbor scenarios provided by the IRS.  This will allow you to select the one that is in the best interest of your district.

There are three important components to management, monitoring, and compliance: talking to your benefits consultant; discussing specifics with legal counsel and/or tax counsel, if needed; and ensuring that you have the data in a manageable and retrievable manner to monitor compliance.

Mark Bedford is the Senior Product Director for Digital Schools, LP. He works closely with clients in defining requirements for new functionality. He is a frequent speaker and author on emerging issues to the K-12 sector including Position Control and ensuring that Districts are managing personnel time and associated costs.

Craig A. Schilling, Ed.D is currently an Associate Professor at Concordia University Chicago. He has spoken throughout the United States on school business management issues. He is also the coauthor of three books. Craig has served as President of Illinois ASBO and on the Board of Directors of ASBO International. 

Sign up for our K-12 newsletter

Newsletter: Innovations in K12 Education
By submitting your information, you agree to our Terms & Conditions and Privacy Policy.

Want to share a great resource? Let us know at

eSchool News uses cookies to improve your experience. Visit our Privacy Policy for more information.