FAQ’s on Employer Shared Responsibility Rules Under the Affordable Care Act

Submitted by statecreative on Mon, 02/24/2014 - 15:56
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The Affordable Care Act (ACA) imposes a penalty on applicable large employers that do not offer affordable, minimum value coverage to full-time employees and their dependents. These penalties are often referred to as the “employer shared responsibility” penalties. On Feb. 10, 2014, the U.S. Treasury Department released final regulations implementing the employer shared responsibility provisions of the ACA.

The final regulations include a number of new transition rules and many employers have questions on how these new rules will apply in the coming years. Heffernan has created an FAQ to help employers understand what has and has not changed.

1. Do small businesses with less than 50 full-time employees (including full-time equivalents) have to provide health insurance coverage?

No, the ACA does not require small businesses to offer coverage and there is no plan to extend the requirement to offer coverage to small businesses in the future.

2. How do I know if my business is a large employer?

In 2015, an employer may look to any consecutive period of at least six months during the 2014 calendar year to determine whether it employed an average of at least 50 full-time employees (including full-time equivalents). Beginning in 2016, an employer must determine its status by averaging the total number of full-time equivalent employees for each of the 12 months of the preceding calendar year.

3. Are seasonal employees taken into account when determining the number of full-time employees?

Yes, the most recent IRS Questions and Answers specifically states that seasonal workers are taken into account in determining the number of full-time employees. However, if an employer’s workforce exceeds 50 full-time employees (including full-time equivalents) for 120 days or fewer during a calendar year, and the employees in excess of 50 who were employed during that period of no more than 120 days were seasonal workers, the employer is not considered an applicable large employer.

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