Issue link: https://www.e-digitaleditions.com/i/138053
The Benefits Package Who's Considered Full Time? Healthcare reform mandates will keep organizations on their toes about maintaining worker classification. By L. Scott Austin and David Mustone With a substantial portion of the Patient Protection and Affordable What are the potential penalties? The failure to offer coverage Care Act (PPACA) set to go into effect in 2014, employers are penalty applies if at least one full-time employee obtains working to determine how the law will impact them, their business, government-subsidized coverage on an exchange where the and their employees. Because the law will require most employers employer does not offer coverage to at least 95 percent of its full- to provide affordable minimum essential health insurance coverage time employees and their dependents. This penalty—up to $2,000 to full-time employees or face financial penalties, employers must per year for each full-time employee (in excess of 30) —will be understand how the law defines full-time workers, as well as the based on the total number of full-time employees an employer has, penalties that businesses can face for failing to comply or choosing regardless of how many employees have government-subsidized not to provide coverage. exchange coverage. Under the employer shared responsibility rules provisions, the The insufficient coverage penalty applies if the employer offers full- PPACA requires large employers (generally those with 50 or more time employees coverage, but the coverage is either unaffordable full-time employees) to provide affordable group health coverage (individual premium cost exceeds 9.5 percent of the employee's with sufficient value to full-time employees and their dependents. household income) or does not provide minimum value (plan pays Full-time employees are generally defined as those who work on less than 60 percent of the covered costs). Proposed regulations average at least 30 hours per week. Employers that fail to comply released by the IRS provide guidance and alternative safe harbors with these rules can face penalties. for calculating whether health coverage is unaffordable, including [54] HRO TODAY MAGAZINE | JUNE 2013