Businesses nationwide are preparing for the financial impact of paying for their employees’ Health insurance under the Affordable Care Act (ACA) which takes effect January 1, 2014. The mandate will apply to any company with 50 or more full-time (or “full-time equivalent”) workers, under penalty of paying $2,000 a year for every worker in excess of 30 employees. A business faces other fines if Uncle Sam determines that the Health plans it offers employees (and their dependents) are unaffordable or don’t meet federal regulations. Companies with fewer than 50 full-time employees are exempt from the penalty.
What’s more, a little-known federal regulation bases the exemption from providing mandatory health insurance on the number of employees that a business has in 2013, not the number it will have next year — which means that the sooner you decide on setting the size of your workforce, the better. To help you make this decision, consider these guidelines under the ACA:
- A full-time employee is one who is employed an average of 30 hours per week, or 130 hours in any given month. This definition includes seasonal employees who meet the hourly requirements.
- To calculate the number of full-time equivalents in a given month, add all the hours worked, but not more than 120 hours of service for any employee, and divide the total by 120.
As always, our Employee Benefits professionals stand ready to offer their advice. Just give us a call at any time.
