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The Affordable Care Act: Upcoming Responsibilities for Employers

Published:  July 22, 2014

For the past few years it seems you could not go a single day without hearing about Obamacare or the Affordable Care Act (as it is formally known). Although the conversations have died down a bit, the Affordable Care Act (ACA) is still bringing changes. Of interest to employers are the upcoming changes required for compliance with the ACA.

One change necessary for compliance is under the Employer Shared Responsibility provision of the ACA. Specifically, employers with 100 or more “full-time” employees will soon (at the beginning of 2015) need to offer health coverage to at least 70 percent of their employees in order to avoid fines. At the beginning of 2016 this percentage of health covered employees will increase to 95 percent for large employers, and companies with 50-100 “full-time” employees will need to offer coverage for at least 70 percent of their workforce to avoid penalties.

The law has outlined two methods of determining how many “full-time” employees an employer has. The first method is the Month by Month method; this method states that a “full-time” employee is any employee who averages at least 30 hours of service per week for a calendar month. “Service” includes paid time off for: vacation, holidays, illness, incapacity, disability, layoff, jury duty, military duty, or leave of absence. The second method of determining your number of “full-time” employees for the purpose of the ACA, is the Look-Back Measurement method. This method allows employers to determine their number of “full-time” employees by choosing a period of time within the past year (three months, six months, etc.) and counting backward, relying on the assumption that an employer will have roughly the same amount of employees from year to year.

To learn more about the Affordable Care Act and employer compliance, attend our seminar: “The 411 on the Affordable Care Act: What Every Employer Must Know and Do to Comply” on September 11, 2014. 

If you have any questions regarding the Affordable Care Act and employer compliance, please contact any of the attorneys at Royal LLP at (413) 586-2288.