Full-Time Equivalent Employees

ENY1123

New Member
1
My company currently employs 100 FTE( based on 32 hours/week) and 30 PTE (based on 16 hours/week).On my medical plan, I have 82 FTE participating with employee only status.
1. Do my 30 PTE count as 15 FTE(for purposes of determining the 95% participation requirement of FTE)?
2. Does the 95% rule apply to the number of FTE (based on 32 hours/week) OR the number of FTE plus the PTE who qualify as FTE based on the fulltime equivalent (i.e. 30 PTE = 15 FTE as stated above)?
3. If I don’t reach 95% participation in any scenario, is this grounds for penalties of $2000 per person/per year after 30 employees?
 
 
You might want to re-post this in the employee benefits forum. Even though it is a duplicate post, which is usually verboten, you might get more traffic there from folks who are active in group health plans.
 
Let me caution you, since this is your first time posting. Keep in mind, you have no idea who is responding and what their expertise may or may not be. This is true of any board. And since you are asking about PPACA, which is new and still not fully understood, this is even more important. A couple of things:

1. keep in mind that full-time is now 30 hours.
2. an employee is considered full time if they work an avergage of 30 hours per week during that MONTH.
3. Part timers formula for FTE is "total of all hours worked by the all the part-timers divided by 120" for that MONTH.
4. If you have controlled groups, they are included.
5. There are special rules for new, variable hours, seasonal employees, etc.
6. If you don't offer coverage (as required by the law) then the penalty is $2,000 per person, less the 30. If you do offer coverage and someone access the exchange subsidy your penalty is lesser of the $2,000 per (less 30) or $3,000 per person eligible for the subsidy.
7. Penalty is only used if someone gets the subisdy at the exchange.
8. Keep in mind, the employer doe not need to offer coverage to all dependents, just the kids to 26.
Hope this helps.
 
My company currently employs 100 FTE( based on 32 hours/week) and 30 PTE (based on 16 hours/week).On my medical plan, I have 82 FTE participating with employee only status.
1. Do my 30 PTE count as 15 FTE(for purposes of determining the 95% participation requirement of FTE)?
2. Does the 95% rule apply to the number of FTE (based on 32 hours/week) OR the number of FTE plus the PTE who qualify as FTE based on the fulltime equivalent (i.e. 30 PTE = 15 FTE as stated above)?
3. If I don’t reach 95% participation in any scenario, is this grounds for penalties of $2000 per person/per year after 30 employees?
 

1. Do my 30 PTE count as 15 FTE(for purposes of determining the 95% participation requirement of FTE)? No, because only full-time employees (30 hours or more) must be considered eilgible for the insurance. Part-timers can be an ineligible class. Be sure to read the rules about variable hour employees to make sure you categorize them correctly as part-time or full-time.

2. Does the 95% rule apply to the number of FTE (based on 32 hours/week) OR the number of FTE plus the PTE who qualify as FTE based on the fulltime equivalent (i.e. 30 PTE = 15 FTE as stated above)? Same situation as above. However, be careful of the acronyms you use. FTE actually means "full-time equaivalent" not "full-time employee". So, if you are asking if the 95% rule applies to the number of full-time employees only, then the answer is yes because part-timers can be an ineligible class. Note also that the law just says 30 hours a week for full-time status, not 32 hours a week.

3. If I don’t reach 95% participation in any scenario, is this grounds for penalties of $2000 per person/per year after 30 employees? You must offer it to at least 95% of your eligible full-time employees. Employees don't have to accept your offer. The word participation usually means how many actually participate in the plan. The 95% rule is based on how many are eligible for the plan, whether or not they decide to participate.

And.... I echo Leevena's caution to seek expert advice. If you let us know what state you are in, we could make some recommendations.
 
February 15, 2014

These updated and revised IRS regulations describing how to define an "employee" are quite confusing. I hope the ultimate responsibility for proper classification is at the employer level. Agents/Brokers shouldn't get involved in this soup.

Excerpt:
"No matter how you label someone, the substance of the work relationship will control. The IRS says you must evaluate 20 factors and assess whether you are controlling the method, manner and means of the work. No one factor is controlling.

The duration of your work relationship is important, as is whether the work is full or part time. Professional credentials, flexible vs. rigid hours, who supplies tools and supplies, expense reimbursements, etc., all count. A written contract is a must for independent contractor status, but a contract alone is not enough.

Some people ask whether you are paying for a job—say having someone put in a new kitchen—or paying for someone to work by the hour doing reception work? However you phrase it, the fundamental worker status issue has become one of the most consequential legal determinations around.

Yet the IRS Inspector General issued a report claiming that employers are still getting it wrong. The report says millions of workers are misclassified as independent contractors. They are really employees, the report claims, and that means payroll tax withholding."

Source: Think Under 50 Employees Definitely Means No Obamacare? Think Again - Forbes

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Simple question around some issues in this topic. I have been told that employers could define their own version of full time, as long as over 30 hours.
For example, employer says: full time is 40 hours a week. Then, like magic, some people are now working, say, 39.9 hours per week, or some variation.
Then, of course, salary vs. hourly...what to do. This is for purposes of allowing some employees to have a status change that would allow them to be exchange (Marketplace) eligible.
This is my myth debunking site...
 
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