The Affordable Care Act (Obamacare): 25, 50, 100 and 30/130...How do these numbers affect your business?
The Affordable Care Act (aka Obamacare) has provided quite a bit of confusion, frustration and anxiety for small and large employers. The question is…do you know if you are classified as small of large for purposes of ACA compliance? Furthermore, why is it important?
Chew on this for a moment:
· Starting 2015 employers with 100 or more full-time employees will need to cover 70% of the full-time employees.
· In 2016 employers with 50 or more full-time employees will need to provide coverage to substantially all of their full-time employees (or 95%).
So…the simple answer is ‘if you are an employer with at least 50 or more full-time equivalent employees, you are a subject to the Employer Mandate (aka Employer Shared Responsibility Payment).” This means that that there is a per employee fee for employers with 50 or more full-time equivalent employees who don’t offer coverage to those full-time employees. That said, as things stand, there are still aspects on the table to apply to companies with 100 or more and 25 or less full-time employees (look for more information in future articles).
As I imagine hearing many of you sighing with relief thinking “Gee…it’s a good thing I only have 49 full-time employees right now” all I can say is to STOP and LISTEN! Keep in mind that earlier I indicated that it was the simple answer. Now, I am going to attempt to direct you away from trouble.
Determining if you are considered a large employer requires looking at the preceding 12 months period to calculate the number of full-time/full-time equivalent employees that you employed. So, if you are establishing whether or not you are subject to large group compliance and your date is January 1, 2015, you would review the period from January 1, 2014 through December 31, 2014.
Wow! Just heard another sigh and the thoughts that “It’s a good thing I classify full-time as 40 or more hours in a workweek!” Once again…time to put on the brakes. Full-time employees are considered those who work at least 30 hours in a workweek in any given month…or use 130 hours per calendar month to make it a bit easier (30/130).
By now many of you will likely be scratching your head and scrambling for your computer to find out what this revelation means for your business. Whatever you do, just be sure that you don’t assume that you are a small business under the ACA and end up being held to the provisions (and possible fines) of the Employer Mandate.
If you have questions about ACA compliance and whether or not you are a small or large employer for its purposes, give us a call!
Look forward to future blogs and articles about the ACA.
About the Author
Dr. Carlyle Rogers is the President and CEO of the BPSC Group, LLC and author of Dirty Little Secrets: Declassifying the Employment Game. He has over 20 years of HR, operations, employment law, and strategic development experience. Carlyle has Doctorates in Psychology and Jurisprudence and resides in Los Angeles with his family.