In our last blog article, we discussed how the “Employer Mandate” portion of the ACA has been delayed until January 1, 2015. Part of the reason for the delayed implementation has been the complicated financial impact and unclear reporting requirements related to modifying full-time and part-time employment status.
What this means is that employers that rely on large numbers of part-time employees (like restaurants and retailers) now have an extra year to make some difficult decisions about their workforce and their labor costs. Conversely, it also means that part-time employees need to stay informed about how the ACA affects their access to health care insurance.
New Rule: New Hours
Under the ACA’s new rules, a full-time employee is now defined as an individual who works at least 30 hours or more during the week, or 120 hours or more per month. A part time employee is now considered an individual who works less than 30 hours per week. Remember, the employer mandate provision requires companies with 50 or more full-time employees to provide “qualified” healthcare coverage to these employees, or pay an annual penalty of $2,000 per each full-time employee (after the first 30 full-time employees are assessed) if such coverage is not provided.
Current statistics show that about 2 million workers will be affected by the employer mandate, and it would follow that part-time employees who currently work 30-39 hours per week are the most at risk.
From a very large employer’s perspective, it may make financial sense to begin limiting all part-time employees to a 29 hour work week. This will definitely allow employers to save on their health insurance costs. You can bet that in the next year, many of these employers will crunching the numbers to find out if implementing a policy like this will help their bottom line.
However, with a reduction in work hours, these part-time employees will definitely feel a financial strain. For them, the new ACA rules may deal them a triple financial hit: less income PLUS they’re not eligible for their employer’s healthcare coverage, PLUS the potential tax penalty ($2000!) for choosing to have no coverage at all.
The good news is that most of these part-time employees who do not receive healthcare coverage from their employer will be able to find affordable health insurance in the “individual” market, or through state exchanges. Regardless of the source of the insurance, many of these part-time employees who obtain insurance through the private market, or through state exchanges, may then qualify for generous tax credits. These tax credits will be available for lower to middle income individuals and families who meet specific healthcare coverage requirements.
The Law Office of Brandon Woodward P.A. is eternally grateful that you have visited our web site or read our blog. The materials and information contained here are provided for informational purposes only and are not to be considered as legal advice. For questions about ACA and its affect on your business, or any other legal issues facing your business, please a message us at firstname.lastname@example.org and we’ll give you a totally FREE consultation.