Apothegm Software
Introducing PoP Navigator(TM)... Our Health Care Reform Product for Large Employers

Health Care Reform Product

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PPACA legislation requires that large employers offer each eligible full time employee qualified coverage that meets the ACA affordability and sufficiency requirements or incur a “play penalty”, or alternatively, not offer ACA qualified coverage and incur a “pay penalty”; also referred to as thePay or Play Employer Mandate

ACA Will Impact Most Employers with More Than 50 Full Time Equivalents (FTEs).

PoP Navigator™ Is The Web-based Solution to ACA Large Employer Penalties:

  • Detailed cost projections under ACA Shared Responsibility
  • Model multiple scenarios and compare net costs side-by-side
  • Suggested solutions to ACA cost challenges

PoP Navigator™ Helps You Answer These Questions:

  • What will be my sponsored plan costs and potential ACA penalties in the coming years?
  • What are the specific sources of my potential penalties under ACA? In which years?
  • What are some solutions to minimize or eliminate potential ACA penalties?
  • How can I design my own alternative scenarios to address potential ACA penalties?
  • How can I comply with ACA requirements yet reduce my total costs?
  • What will my net costs be if I do not sponsor a qualified health plan?
  • What are the incremental and net costs of alternative scenarios?
  • If the ACA rules change again, what will be the net cost impact on my plans?

Click here for a checklist of information you will need prior to your analysis by PoP Navigator(TM)…

Use Apothegms “Pay or Play 101” interactive educational tool to understand the ACA Shared Responsibility issues that may impact you or your client’s company. Learn about the key functions and features of PoP Navigator™ that will aid you in developing a successful ACA strategy.

PoP Navigator™ (PoP) addresses the following legislative issues and provides the subsequent business modeling tools:

Health Plan Evaluation

Employee Modeling and Migration

Tax Impacts

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Health Plan Evaluation

Sufficiency: An eligible employer-sponsored plan provides minimum value only if the plan’s share of the total covered (allowed) costs of benefits provided under the plan is at least 60 percent (actuarial value). This plan evaluation must be actuarially certified under the rules issued by Health and Human Services (HHS). The valuations in PoP are approximations only. You may contact a qualified health actuary to receive a fee estimate for consultation regarding plan valuation and benefit design alternatives by submitting a request in our Contacts section.

Affordability: Under ACA for 2014 a qualified employer-sponsored health plan, in addition to other requirements, must be affordable to all eligible employees. A qualified employer-sponsored plan is affordable for an employee if the portion of the annual premium the employee must pay for self-only coverage in the lowest cost qualified plan of sponsored benefits does not exceed the ACA maximum contribution percentage of the employee’s annual wages (9.5 percent for taxable years beginning before January 1, 2015). The assumption within PoP is based on proposed government rules. We expect final determination of affordability for any one person will be performed by the Exchange, which will be based on the employee’s total household income and include eligible family members, if such person applies for coverage in an Exchange. Note that the rules to determine affordability may change for 2015 and beyond.

Should all sponsored health plans of a large employer fail either of the above qualifications, there are financial consequences:

‘Pay’ Penalty: If a company decides to not offer coverage, and any employee seeks coverage on an Exchange and receives a subsidy, the employer will be liable for the ‘Pay’ Penalty. This penalty is $2,000 per full time employee, less the first 30 employees, in 2014. The penalty amount will be indexed annually based the medical inflation rate after 2014 as determined by HHS. Employees applicable under this penalty are all FTEs as defined under ACA (see below).

‘Play’ Penalty: If a company does provide health coverage for its employees, the employer may still be subject to a penalty. The coverage offered must meet the conditions above for Sufficiency and Affordability. If either of these conditions is not met, and an employee seeks coverage on an exchange and receives a subsidy, the employer will be subject to the ‘Play’ Penalty. The ‘Play’ Penalty in 2014 is $3,000 per eligible employee receiving a subsidy enrolled in an Exchange, not to exceed the aggregate amount that would be incurred under the ‘Pay’ Penalty described above. This amount is also indexed annually to medical inflation after 2014 as determined by HHS. PoP evaluates each employee provided in the census upload for every year from 2014 through 2018. All employees meeting conditions that may lead them to an exchange and receive a subsidy are termed as ‘At Risk’. See Employee Modeling and Migration – Exchange Qualification for more about conditions that make an employee ‘At Risk’.

Who is considered a Full-Time Employee under ACA? Rules have been issued by HHS and IRS defining methodologies to determine full time employee status for the purposes of implementing ACA. In addition to all permanent employees working 30 or more hours per week (full time employees definition), there are other categories of employees addressed in the rules including how to determine whether full time status applies to other employment categories such as temporary, short term and seasonal employees. Please refer to the appropriate government websites or a qualified employee benefits consultant for specific rules that may apply to your situation.

Rate Projection and Contribution Modeling: PoP includes the Apothegm Rate Modeling System. This system values benefit changes for many commonly used plan benefit categories in each year from 2014 through 2018. The tool will use your company’s current rates and benefits, along with alternative benefit changes, which you can input, to forecast future rates for each reporting year. Additionally, PoP will use your company’s current contribution strategy to model contributions by year from 2014 through 2018. Company and employee contributions can be adapted in the tool to model new strategies and their estimated financial impact so you can explore alternate financial outcomes.

Grandfather Status: If a company has previously declared a plan to have a Grandfather status, and has maintained the appropriate conditions since March 23, 2010, PoP will evaluate if selected actions entered in the tool may compromise this status. The tool evaluates four of the five grandfather qualifying conditions;

Conditions evaluated by the tool:

Condition: Any increase in a percentage cost-sharing requirement, such as an individual’s coinsurance, above the amount that applied on March 23, 2010.

Condition: An increase in a fixed-amount cost-sharing requirement that applied on March 23, 2010 other than a copayment (for example, deductible or out-of-pocket limit) by a total percentage that is more than the medical inflation percentage rate plus 15%; The imposition of a new overall annual limit or a decrease in the amount of an existing annual limit on the dollar value of benefits.

Condition: An increase in a fixed-amount copayment that applied on March 23, 2010 by more than the greater of $5 (increased for medical inflation) or the medical inflation percentage rate plus 15%.

Condition: A decrease by an employer in its contribution rate towards the cost of any tier of coverage for any class of similarly situated individuals by more than 5% below the employer’s contribution rate for the coverage period that included March 23, 2010.

Conditions not evaluated by the tool:

Condition: The elimination of all or substantially all benefits to diagnose or treat a particular condition.

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Employee Modeling and Migration

Non-covered Employees: Employees currently not covered because of the new hire waiting period, personally waived coverage or are ineligible by current plan rules for coverage are evaluated by PoP to determine who may migrate into the employer’s plan or an Exchange plan. The migration logic uses ACA eligibility rules, the employee contribution toward the employer’s lowest cost qualified plan for employee only coverage (2014), employee age, and employee wage relative to the Federal Poverty Level (FPL).

Exchange Qualification: Each employee is evaluated as to the likelihood that they will migrate to an exchange plan, and if so, will they incur a ‘Play’ penalty for the employer. PoP migration logic is based on the employee’s wage relative to 400% FPL or lower. The tool currently uses the employee’s wage as a surrogate for household income and compares the EE Only rate and employee contribution for 2014 and the employee’s dependent tier rate and contribution for 2015 and later. This approach is assumed to be consistent with current regulatory guidance and probable future changes. It will be difficult for employers to assess household income and this requirement may be waived or modified by future government issued rules. If a wage forecast has been provided, employee wages will be projected and compared against projected contribution and Medicaid qualification. Any employee the tool determines is likely to seek and receive subsidized coverage on an exchange is considered ‘At Risk’.

Expanded Medicaid Qualification: Any employees meeting Medicaid qualification requirements are moved from the responsibility of an Exchange to Medicaid. If an employee status is creating a ‘Play’ penalty for the employer, a move to Medicaid will eliminate this penalty for such employee. ACA Medicaid expansion makes it more likely that an employee may qualify for Medicaid, but only if the state of residence adopts this provision…. which is optional by state. PoP uses employee wage relative to the FPL, family tier, and their state of residence to determine the likelihood the employee will qualify and migrate to Medicaid. The tool makes an assumption about which states will opt out of the Medicaid expansion based on either the actual announced intentions of the state, or the probable direction the state will take.

Employment growth/contraction: PoP enables the user to enter a forecast for future employment growth or contraction. The forecasting will proportionally impact total employee counts, At-Risk employee counts and non-covered employee counts starting in 2014 continuing through 2018. Forecasting can be set at the Company, Employee Classification or benefit plan (coverage) level. Each successive level provides an opportunity to improve the sensitivity of the projected costs and penalties due to more detail in the forecast.

Wage growth/contraction: PoP also enables the user to enter a forecast for future wage growth or contraction. The ability to forecast future wages in conjunction with likely future medical rates and the planned employee contribution modeling function provides a more accurate assessment of future costs and penalties.

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Tax Impacts

Excise Tax: The ACA Excise Tax for “Cadillac Plans”, or those health plans whose annual costs per employee exceed $10,200 for individuals or $27,500 for families, will take effect in 2018, and will be annually indexed by HHS. PoP will forecast all company health coverage rates to 2018 to test for violation of the Excise Tax thresholds and calculate the associated tax.

Corporate Tax: PoP calculates three outcomes for each scenario starting in 2014; projected sponsored health plan costs without the impact of ACA, projected health plan related costs under ACA regulations known or estimated, and the cost under ACA of not offering a sponsored health plan. PoP then evaluates the impacts to corporate taxes for both the ACA outcomes of offering/not offering coverage. Since employee health coverage costs are a deductible expense, decisions made regarding ACA will have an effect on company income taxes. ACA penalties are not deductible expenses for income tax purposes.

Subscriptions to PoP Navigator™ may be purchased on a monthly or annual basis.  The benefits of the two plans are…



  • Lowest cost single use option (if used for only one month).
  • Provides an analysis of your company with current conditions and regulations.
  • Allows creation of multiple scenarios, use of the full PoP Reports Library and Auto-Navigation help features.
  • May be cancelled at any time.


  • Lowest cost long-term option.
  • Provides an analysis of your company with current conditions and regulations.  Come back as many times throughout the year as you like and update your analysis against new regulations and conditions.  PoP is updated as regulations change, and stores your data to be re-analyzed at the push of a button.
  • Allows creation of multiple scenarios, use of the full PoP Reports Library and Auto-Navigation help features.
  • Receive a free subscription to the PoP Employer Mandate Newsletter; PoP will let you know when there are new regulations, reports or tools available.  PoP will let you know when its time to come back and update your analysis!
  • May be cancelled at any time.


Monthly per Company

Annual per Company

First Company



2 – 4 Companies



5 – 9 Companies



10 – 15 Companies



Ask us about additional discounts for purchases larger than 15 Companies!

The PoP Navigator™ (PoP) reports library currently consists of three reports.  These reports are available on demand, at a buttons push, by the user.  Additional data and analysis is available by contacting one of our actuarial consultants:

Comparison Analysis and Scenario Summary

Company Analysis Packet

Employee At Risk Summary Report

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Comparison Analysis and Scenario Summary Report (PDF Report)

Overview: The Comparison Analysis and Scenario Summary (CASS) Report is an executive summary of the CAP report providing just the high-level details of the Employee and Financial Analysis for the sponsored coverage and no sponsored coverage outcomes. The report provides a summary for 2014 through 2018 outcomes and allows the user to view up to three different scenarios for the same company side-by-side.

*Sample Employee Analysis from CASS Report…

*Sample ACA Financial Analysis from CASS Report…

*Sample No Coverage Financial Analysis from CASS Report…

*Actual report includes additional content.

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Company Analysis Packet (PDF Report) 

Overview: The Company Analysis Packet (or CAP Report) provides a detailed analysis for a single scenario. The report contains an Employee Analysis of enrollment and a Financial Analysis with three potential outcomes per year from the current coverage year through 2018. The report has selectable sections, so you can receive the level of detail you desire.

Employee Analysis: Enrollment analysis for each year is provided for the company, broken down by each employee classification and coverage. Analysis includes Average Wage, Medicaid Expansion qualification, 400% FPL Income indicator, Failed Affordability Test indicator, and EE At Risk Indicator. EE At Risk Indicator represents employees that are at risk of incurring a ‘Play Penalty’ for the employer.

Financial Analysis: Three potential outcomes for each year are analyzed; projected sponsored health plan costs without the impact of ACA, projected health plan related costs under ACA regulations, and the cost under ACA of not offering a sponsored health plan. Analysis includes tax impacts and total costs for the company and can be displayed separately by employee classification and by benefit plan.

*Sample Employee Analysis from CAP Report…

*Actual report includes additional content, information, and analysis.

*Sample Financial Analysis from CAP Report…

*Actual report includes additional information and analysis.

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Employee At Risk Summary Report (MS Excel Extract)

Overview: The Employee At Risk Summary Report provides detailed reporting for employees ‘at risk’ of incurring a penalty for the employer due to potential subsidy qualification from an Exchange.  The report displays key census and Employee Analysis data for each ‘at risk’ employee, and is available in MS Excel, enabling the user the opportunity to conduct additional analysis of the information.


Sample data from Employee At Risk Summary Report extract…

In addition to providing analysis, PoP Navigator™ includes automated solutions options. These ‘Targeted’ solutions assist in immediately solving some of the most common challenges organizations face under ACA:

• Targeted Hour Adjustment for Part-Time
• Targeted Contribution for Affordability


Targeted Hour Adjustment for Part-Time

ACA has defined full-time employment for variable hour employees as any employee averaging 30 or more hours per week.  Under the Employer Mandate, ACA further requires employer sponsored coverage for all full-time employees. Large employers are increasingly considering the strategy of reducing variable hour employees to 29 or less hours per week to avoid increasing the cost of their sponsored plans.

The Targeted Hour Adjustment for Part-time (THAP) report reviews the employee census for a selected company and scenario, and then estimates the cost or savings of applying this strategy.


Targeted Contribution for Affordability



Employees that qualify for an Exchange Subsidy cause their employer to incur a “Play Penalty” of $3,000 per year (2014 penalty amount).  One of the conditions that triggers this penalty is when the employer sponsored plan does not meet the ACA Affordability requirement.  Affordability is defined as;

An employee eligible for employer sponsored coverage, with income less than 400% of the Federal Poverty Level (FPL), should not have to contribute more than 9.5% of their income toward the coverage premium for the lowest cost ACA sufficient benefit plan, employee only coverage (2014).

Employees with employer sponsored coverage that is not Affordable may seek coverage on a state or federal Exchange and receive a subsidy based on a sliding scale of FPL level and rate contribution percentage.

As an employer, there are two direct ways to eliminate the risk of incurring a Play Penalty for an eligible employee that is not offered Affordable coverage through a sponsored plan:

  1. Increase the employee’s income so that contributions to the sponsored coverage are 9.5% or less of their new income.
  2. Decrease the employee’s required contribution (increasing the employer’s contribution) to the coverage premium so that his/her contribution amounts to less than 9.5% of their current income.

The Targeted Contribution for Affordability Report (TCAR) reports the results of an automated calculation that solves the Affordability issue for all affected employees by using the second strategy from above; increasing the employer contribution toward specific plan premium rates.