January 26, 2016 Miguel Delatorre

Most common questions about ACA compliance for your business

6 most common questions about ACA compliance

The time is here, it’s 2016 and businesses all over the country are scattering and focusing efforts on the changes rolled out from Obamacare. The Affordable Care Act or ACA for short proposed by the Obama administration in 2009 and signed into law as of March 23, 2010 is here. Human Resources and Accounting departments across the country are scampering and collaborating their efforts to ensure compliance within their organizations.

Easy Clocking has put together some of the most common questions asked over and over (and over…) again from our client base be it by phone or e-mail.

Keep reading below to see the most common questions about ACA compliance our customers are asking:

1.) Can part-time employees be considered full time?

A: Part-time employees may be considered full time should they attain FTE status throughout your measurement period.

 

3.) Wait, I just started my company do I have to abide by these regulations?

A: Sad to say but new companies do not get a pass on the ACA mandate. The IRS regulations stipulate that a new business expected to employ an average of at least 50 employees is, in fact, an applicable large employer(ALE).

New companies do not get a pass on the mandate, even though they have no previous experience to determine their status. According to the I.R.S. regulations, a new business is an applicable large employer in its first calendar year “if the employer is reasonably expected to employ an average of at least 50 full-time employees” during that first year “and it actually employs an average of at least 50 full-time employees” on “business days during the calendar year.”

 

5.) Can I use varying measurement periods for my employees?

A: No, you are obligated to use one unanimous measurement system throughout your company being measured. measurement periods as defined through the lookback method proposed by the Internal Revenue Service (IRS) “the look-back measurement method, an employer may determine the status of an employee as a full-time employee during what is referred to as the stability period, based upon the hours of service of the employee in the preceding period, which is referred to as the measurement period. The look-back measurement method may not be used to determine full-time employee status for purposes of ALE status determination.” 

 

5.) What about seasonal employees? Do they get measured?

A: Yes they do!

Below we have an example provided by the IRS on ACA compliant seasonal employee measurement.

EX: Employer D offers health plan coverage only to fulltime employees (and their dependents). Employer D uses a 12-month initial measurement period for new variable hour employees and seasonal employees that begin on the start date and applies an administrative period from the end of the initial measurement period through the end of the first calendar month beginning after the end of the initial measurement period. Employer D hires Employee S, a ski instructor, on November 15, 2014 with an anticipated season during which Employee S will work running through March 15, 2015. Employer D determines that Employee S is a seasonal employee based upon a reasonable good faith interpretation of that term. Employee S’s initial measurement period runs from November 15, 2014, through November 14, 2015. Employee S works 60 hours per week from November 15, 2014 through March 15, 2015, but is not reasonably expected to average 30 hours per week for the 12-month initial measurement period. Accordingly, Employer D does not treat Employee S as a full-time employee, and does not offer Employee S coverage.

(Khoury, 2012)

 

And finally…

 

6.) What if I give coverage to all employees?

A: Then you are automatically ACA compliant!

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