R 4637 RESOLUTION NO. 4637
A RESOLUTION OF THE CITY OF ARROYO GRANDE
ADOPTING PROCEDURES FOR IMPLEMENTATION OF
THE PATIENT PROTECTION AND AFFORDABLE CARE
ACT ("ACA")
WHEREAS, the Patient Protection and Affordable Care Act ("ACA") was enacted on
March 23, 2010;
WHEREAS, 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;
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");
WHEREAS, Section 6056 requires an applicable large employer to file with the Internal
Revenue Service an annual return for each full-time employee;
WHEREAS, the City of Arroyo Grande ("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;
WHEREAS, the Department of Treasury issued final regulations regarding Section
4980H that permit the City of Arroyo Grande ("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);
WHEREAS, the City of Arroyo Grande ("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 reporting purposes and for purposes of the Assessable Payment.
WHEREAS, the Department of Treasury, issued final regulations regarding Section
4980H that permit the City of Arroyo Grande ("City") 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);
RESOLUTION NO. 4637
PAGE 2
WHEREAS, the City of Arroyo Grande ("City") intends to use the affordability safe
harbors as contemplated in the final regulations;
WHEREAS, the City of Arroyo Grande ("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 of Arroyo Grande ("City") expects that further guidance and
regulations may be issued regarding ACA.
NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Arroyo
Grande as follows:
1. The City of Arroyo Grande 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 City of Arroyo Grande does not establish the Look Back Measurement
Method Safe Harbor for the purpose of determining eligibility for an offer of
medical coverage for 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 and employees in the Management
group shall be governed by the Management Resolution.
3. The City of Arroyo Grande hereby delegates authority to the City Manager,
including his/her designee(s), to create an Administrative Policy 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 to comply with the Look Back
Measurement Method Safe Harbor.
4. For each reasonable category of employees, the City of Arroyo Grande 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 City of Arroyo Grande hereby delegates authority to the City Manager,
including his/her designee(s), to establish an Administrative Policy to comply with
any of the three affordability safe harbors in accordance with and as permitted by
Section 4980H.
RESOLUTION NO. 4637
PAGE 3
6. The City Manager, including his or her designee(s), shall have authority to
create, modify or amend the Administrative Police to ensure the City's
compliance with Sections 4980H and 6056 of the Internal Revenue Code.
On motion of Council Member Barneich, seconded by Council Member Brown, and on
the following roll call vote, to wit:
AYES: Council Members Barneich, Brown, Costello, Guthrie, and Mayor Ferrara
NOES: None
ABSENT: None
the foregoing Resolution was passed and adopted this 25th day of November 2014.
RESOLUTION NO. 1037
PAGE 4
TONY FER ,'A , MAYOR
ATTEST:
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KELLY T i•RE, CITY CLERK
APPROVED AS TO CONTENT:
ACTING CITY MANAGER
APPROVED AS TO FORM:
TII11 THY J. RL, CITY ATTORNEY
OFFICIAL CERTIFICATION
I, KELLY WETMORE, City Clerk of the City of Arroyo Grande, County of San Luis
Obispo, State of California, do hereby certify under penalty of perjury, that the attached
Resolution No. 4637 was passed and adopted at a Regular meeting of the City Council
of the City of Arroyo Grande on the 25th day of November, 2014.
WITNESS my hand and the Seal of the City of Arroyo Grande affixed this 26th day of
November, 2014.
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KELLY TM• 'E, CITY CLERK
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