button and finger calculator     

IS YOUR COMPANY SUBJECT TO THE MANDATE?

click on any of the calculators below to be open up Excel spreadsheet calculators:

 1) Group size calculator

  2) Permanent Part-time Hourly calculator    

 3) Seasonal calculator

 

 

DETERMINING TOTAL

 NUMBER OF   EMPLOYEES

 

Employed  an average of at least 50   full-time employees on business days during the preceding calendar year.

 

 

A  “full-time” employee for any month is an employee who is employed for an  average of at least 30 hours of service per week.

 

 

To  determine the full-time equivalents of part-time and seasonal workers, the  employer must add up the total number of hours worked in a month by part-time  employees and divide by 120.

 

 

To  determine the average number of employees for the preceding calendar year,  the employer must calculate the number of full-time and full-time equivalent  employees per month for the year and then divide by 12.

 

 

The IRS uses the Common Law Standard to define an employee – someone that is  under your control at work.

 

 

Hours  of Service can be determined by three different methods for non-hourly   employees – 1) count actual hours worked    2) days-worked equivalency – credit an employee working at least one   hour of service in a day with 8 hours of service for that day and 3)   weeks-worked equivalency – credit an employee working at least one hour of   service in a week with 40 hours of service that week.   Employer can choose method.

 

 

Hours of Service include:  paid leave such as  vacations; holidays; leave for illness, disability or other incapacity;   layoffs; jury duty or military duty.  

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DETERMINING WHICH PART-TIME AND SEASONAL EMPLOYEES   ARE ELIGIBLE FOR BENEFITS

 

As a Mandated Employer with part-time and seasonal employees the ACA requires the employer determine which part-time and seasonal employees will be eligible for benefits.

 

 

To do so the employer must choose a Measurement Period.  Employers may select a fixed 3 to 12 month measurement period for determining whether an employee has averaged at least 30 hours per week.

 

 

Be careful!  The Measurement Period will then determine the groups Stability Period or the period of time the newly   determined eligible employee must be treated as a full-time employee eligible for benefits.  So for example, if the employer uses a Measurement Period of 12 months, then those part-time or seasonal employees that average 30+ hours per week will be eligible for  benefits for 12 months.

 

 

Optional Administrative Period – employers may need time after the Measurement Period   ends to decide which employees must be offered coverage during the ensuing   Stability Period.  The safe harbor allows for an optional Administrative Period between the Measurement Period   and the Stability Period.   This period cannot exceed 90 days or be applied in any way that imposes a gap in the employee’s coverage.

 

 

Uniform Periods for all employees – except between certain employee groups –  collectively bargained versus non-collectively bargained; salaried versus  hourly and employees located in different U.S. states.

 

 

Waiting period for new hires expected to work full-time cannot be longer than 90-days.

 

 

Groups will have the initial Measurement and Stability periods and then must  recalculate an employee’s eligibility at the next Measurement Period for the   next Stability Period – this is ongoing.     This means that an employee not employed during the initial Measurement Period may have an overlap in the next period.   

 

 

 

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TRANSITION PERIOD RELIEF  &

SAFE HARBORS TIME PERIOD

 

 

Solely for purposes of stability periods beginning in 2014, employers may adopt a   transition measurement period that is shorter than 12 months but that is no   less than 6 months long and that begins no later than July 1, 2013 and ends  no earlier than 90-days before the first day of the plan year beginning on or after January 1, 2014 (90 days being the maximum permissible administrative period).

 

 

Employer Mandate is effective on January 1, 2014 but the IRS has provided three  transition rules for non-calendar plan years:

 Relief   for employees eligible on Dec. 27, 2012.   An employer will not face penalties for full-time employees who were   eligible for coverage as of 12/27/2012, as long as the employer offers them  affordable coverage with a minimum 60% value by the first day of the plan year that starts in 2014.

Relief if coverage offered to at least one-third of employees.  For employees not eligible for the above   plan as of 12//27/2012, the same penalty relief applies if the employer   offered at least one-third or more of its employees coverage during the most recent open enrollment period before 12/27/2012.

Relief if at least one-quarter of employees covered.   The penalty relief also would apply if at least one-quarter of   employees were covered under one or more non-calendar year plans that had the same plan year on 12/27/2012.

 

 

When to start measuring hours worked.  Some employers may want to impose a 12-month measurement period followed by an administrative period, with a stability period matching the calendar year.  To do so, employers need to begin tracking   hours of service by 10/15/2012 to set the first stability period equal to calendar year 2014.

 

 

For   employers that currently record hours of service, this may simply involve  sharing already-captured payroll or workforce management date with benefit staff and vendors.  For other employers, however, settling on a strategy and beginning to track needed data this early is daunting.

 

 

For employers with large numbers of short-term employees, shorter measurement and stability periods may be optimal, at least for certain permitted categories of employees.

 

 

But when designing a health benefit strategy to minimize shared-responsibility penalties, a 12-month stability period generally should be considered before alternative approaches to determine eligibility.

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EMPLOYER

NEXT STEPS

 

Decide whether or how to adjust plan waiting periods.

 

 

Gather data to determine whether or how the safe harbors are relevant.

 

 

Consider safe-harbor approaches for offering 2014 health coverage.

 

 

If using safe harbors, determine optimal measurement, administrative and stability periods.

 

 

Amend Employee Handbooks and other documents and communicate to your employees.

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