It seems that every day, there is a development in the emerging world of the Affordable Care Act (“ACA”), which Congress enacted and President Obama signed into law in 2010. The ACA, in part, requires employers of 50 or more full-time employees to provide health care coverage to their employees or pay a penalty.
The ACA defines “full-time employees” as those who work at least 30 hours a week. The penalties include one imposed when an employer with 100 or more full-time employees fails to offer coverage to a sufficient number of full-time employees. That penalty equals the number of full-time employees (minus up to 30) multiplied by $2,000. Another penalty amounts to $3,000 per year multiplied by the number of full-time employees who obtain a premium tax/subsidy on health insurance because an employer fails to provide “affordable” coverage or coverage that does not meet the “minimum-value” requirements.
Many employers are aware of these general requirements and some employers have taken steps to comply with the ACA. This has proven difficult for some employers due to the ever-changing regulations and continued delays, which is why it is imperative that employers remain apprised of the developments and consider how they will operate under them.
Recently, the responsibility of employers to provide health care coverage was delayed to 2015 for large companies with 100 or more full-time employees and to 2016 for mid-size companies with 50 to 99 full-time employees. Although the effective date for compliance has been delayed, the actions employers take now may trigger obligations and/or penalties later. This is because the ACA includes a look-back measurement period for calculating employees’ hours to determine whether they are full-time. The look-back period can be three to 12 months, with those working more than 30 hours per week (130 hours per month) deemed full-time employees.
For large employers (those with 100 or more full-time employees), this look-back period must be implemented this year since they are required to provide health care coverage under the ACA in 2015. This means that how large employers schedule employees this year will determine whether they must provide those employees with health care coverage next year.
All employers, large employers in particular, should audit the number of hours their employees are working this year. This will help prepare employers for the cost of providing health care coverage to full-time employees and/or paying potential penalties next year. It will also allow employers to develop and implement policies now for scheduling and measuring employees’ hours. Ample preparation and sound policies are essential for employers when it comes to complying with the ACA.
The employment attorneys at Adams & Sullivan, P.C., L.L.O. keep apprised of developments to the ACA, work with employers to identify and implement sound and lawful strategies and policies for complying with the ACA, and work with employers to audit employee work hours for purposes of the ACA.