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Sarah R. Bratko, Esq.
Manager of Governmental Affairs
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Beginning January 1, 2015, large companies (classified as having over 100 full time employees) will face penalties if they fail to offer health plans to full-time employees. Companies that have between 50 and 99 full-time-equivalent employees have another year to prepare for the employer mandate, but must still comply with the employer reporting requirements in 2015. The transition relief for these employers through 2015 applies as long as they meet certain conditions, including not cutting back employees' hours or positions in 2015 to keep the business under the 100-FTE employee threshold.
To avoid penalties, applicable large employers must offer health care coverage to full-time employees and their dependents. The ACA defines full-time as a person with at least 130 hours of service in any given month, or averaging 30 hours of service a week.
Employers with more than one business entity may need to consider all their employees as one group to determine if they meet the 100- or 50-FTE employee thresholds. Consult your tax adviser for details.
To measure the size of their workforce, employers can use transition-relief provisions in the ACA regulations and look at any consecutive six-month period in 2014 to see if they meet the 100-FTE-employee threshold that triggers "applicable large employer" status for 2015.
If your business intends to use the ACA's "seasonal worker exception" to qualify for an exemption from large-employer status for 2015, you must look at employment over all 12 months of 2014.
Treasury Department regulations go into extensive detail about how employers should measure whether new employees, seasonal employees and employees whose hours vary from month to month are considered full-time. Restaurant.org/Healthcare offers links to the regulations.
Employers with 50 or more employees will be required to file their first information returns with the IRS and statements with employees in early 2016, based on data tracked in 2015.