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Sunday, January 27, 2013

Healthcare Reform: Smart Employers Prepare Now

Four Smart Steps 
The Patient Protection and Affordable Care Act (Affordable Care Act) obligates "applicable large employers" to provide affordable, minimum essential health insurance to full-time employees beginning January 1, 2014. Smart employers are taking steps now:
  1. Selecting a look-back period in 2013 to determine the "applicable large employer" designation for 2014.
  2. Counting employees and calculating the designation based on a current snapshot in preparation for the official count and designation after the measurement period.
  3. For applicable large employers, choosing a measurement period, administrative period, and stability period for determining and applying employee full-time status for the purpose of insurance coverage.
  4. Establishing reporting and record-keeping practices for tax purposes.
This article takes a closer look at the applicable large employer designation and the first two steps in using timekeeping to prepare for Affordable Care Act obligations.

Selecting a Look-Back Period
Applicable large employers are subject to the Act. These employers have 50 or more full-time and full-time-equivalent employees on business days during the preceding calendar year.

Most employers' designation will be evident without doing calculations--those well over or significantly under 50 employees can easily tell whether the Affordable Care Act applies to them. If the employer is close to 50 or has a combination of full- and part-time employees, it's essential to carefully calculate the applicable large employer designation.

During the transition year of 2013, employers can choose any consecutive 6-month period (rather than the whole calendar year) as the "look-back period" for calculating their employer designation. This designation applies for the calendar year 2014.

For example, a company can choose March through August as the look-back period for measurement. If calculations reveal 50 or more full-time and full-time equivalent employees, then the company has September through December to evaluate or make healthcare arrangements for its employees.

Calculating Large Employer Status

Employees are considered full-time under the Act if they are paid for 30 or more hours per week, on average, during a month. Employers can alternatively use a monthly average of 130 hours or more. The number of full-time equivalents (FTEs) is the average number of hours worked by part-time employees in a month divided by 120.
Add the number of FTEs to the number of full-time employees. If this sum is 50 or greater, then the organization is an applicable large employer.
Attendance on Demand does the work for you. It lets employers look at different look-back periods, see a snapshot in time, and document their applicable large employer status... online at any time.

Learning More

Our next Compliance InSight tackles the topics of measuring and reporting on full time employees -- the last two steps in using timekeeping to prepare for the Affordable Care Act.

1 comment:

  1. Nice Article on Time and attendance as,a time and attendance system is an essential part for any business owner or entrepreneur as it helps in determining the productivity of employees.