In Disability Claims, Voluntary Benefits

Under the Affordable Care Act (ACA), large employers must offer medical coverage to at least 95% of their full-time equivalent employees, and their dependent children aged 26 and under, or face penalties.

The ACA defines a large employer as an employer with 50 full-time employees, although this is not in effect until 2016. Since January 1st 2015, large employers with more than 100 full-time employees are now required to provide healthcare to at least 95% of these employees and their dependents, with the number decreasing to 50 employees as of January 1st, 2016. A full-time employee is defined as an employee that is expected to work on average of at least 30 hours per week or 130 hours per month.

Seasonal staff and staff with variable hours can cause some businesses to fluctuate above and below the threshold amount. Kaylee DeWitt of Patriot Software has provided advice for employers to keep track of their full-time employees.

The Save American Workers Act 2014

In April of last year, the amended Save American Workers Act of 2014 was presented to the house and passed. This bill aims to redefine the ACA’s definition of full-time employees to only cover employees who regularly work 40 or more hours per week, reducing the overall number of employees covered by the mandate.

Since the act was drawn up back in 2010, employers have been reducing their full-time employees, as only employers with more than 50 full-time employees will face penalties for not providing healthcare. Providing health care for employees is expensive, so avoiding paying additional benefits increases their bottom line.

Redefining the number of hours worked will ensure employees can avoid having their hours reduced, but they may not be eligible to receive healthcare benefits from their employer, resulting in a catch 22. These employees who don’t receive employer-provided healthcare could obtain an affordable healthcare plan through the Exchange, but it will most likely be self-funded. The Exchange offers group rate health insurance to individuals.

President Obama has sworn to veto the bill to ensure more employees receive employer-provided healthcare, although this may only stop the bill in progress. Until the act is fully enforced in 2016, we will have to wait and see how this one plays out.

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