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Client owns a restaurant and a catering business. Restaurant has 45 FTE's, catering business has 12 FTE's. Do they hit the 50 FTE mark?
HCR-Controlled Groups?
- Thread starter Full Throttle
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Look through these links. If all under 1 company, he is over 50 EE's and subject to HCR. If two separately owned companies, he might escape HCR, but HHS is cracking down on these shenanigans. Plus, HHS is looking at the employee count in 2013, not 14'
Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act
http://www.gpo.gov/fdsys/pkg/FR-2013-01-02/pdf/2012-31269.pdf
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Great Information at those links, YAgents. I didn't know that the employer must carry Qualified Health Coverage for employees even if there are less than 50 full-time employees. Am I reading it correctly that if all the employees' hours add up to at least 1,500 (30 x 150) hours per week, it's the same as having 50 full-time employees?
Also, I see that HHS issued a proposed-rule this week directing exchange administrators to make available to HHS where each person in the state works, income, hours, etc.. HHS will use this to determine subsidy eligibility.
Story: HHS Proposes Rules to Verify Health Care Premium Subsidy Eligibility - Latest News - Workforce
HHS should have promulgated this proposed rule 2 years ago! No way they'll get all this information from every state by October. Heck..it isn't even an actual rule yet and probably won't become one for several months.
-ac
I believe that is correct, probably to nail the employers moving everyone to part time.
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I don't think this is correct. If under 50 FTE, according to their definition of FTE, no requirement and no penalty
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Yes, multiple part-time employees can add up to equal one full-time-equivalent (FTE) in the "counting" phase. Once the employer reaches a count of 50 FTE's, the employer is subject to the "Employer Shared Responsibility" (otherwise known as play or pay). This is the law that requires employers of 50 or more FTE's to have Qualified Health Benefits or be hit with penalties.
If the employer of 50 or more FTE's does NOT have a group the penalty is roughly $2,000 per full-time employee (after the first 30). If the employer DOES have a qualified group plan the penalty is $3,000 per employee who gets a subsidy.
So, that's how part-timers affect the counting phase. But it's different for eligibility. The reason that employers may put lower-paid employees on part-time status is because the group plan must be available to all FULL-TIME employees who work 30 or more hours per week. Part-timers aren't even eligible. So, let's say it's a restaurant chain with 500 part-timers who are the lower-paid staff (and most likely eligible for a subsidy), and 40 full-time management employees who are on the health insurance. Clearly, the "count" of FTE's is over 50, so they are subject to the law. But the employer escapes both of the play or pay penalties because they have a qualified health plan, and none of the 40 eligible full-time employees will get a subsidy in the exchange.
If the employer of 50 or more FTE's does NOT have a group the penalty is roughly $2,000 per full-time employee (after the first 30). If the employer DOES have a qualified group plan the penalty is $3,000 per employee who gets a subsidy.
So, that's how part-timers affect the counting phase. But it's different for eligibility. The reason that employers may put lower-paid employees on part-time status is because the group plan must be available to all FULL-TIME employees who work 30 or more hours per week. Part-timers aren't even eligible. So, let's say it's a restaurant chain with 500 part-timers who are the lower-paid staff (and most likely eligible for a subsidy), and 40 full-time management employees who are on the health insurance. Clearly, the "count" of FTE's is over 50, so they are subject to the law. But the employer escapes both of the play or pay penalties because they have a qualified health plan, and none of the 40 eligible full-time employees will get a subsidy in the exchange.
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Good overview, just one quick point of clarification. The statement "If the employer of 50 or more FTE's does NOT have a group the penalty is roughly $2,000 per full-time employee" is not technically correct. In order for the penalty to be levied, somone from the group would need to go to the Exchange/subsidy. If no one from this sample group does, then there is no penalty. Now I grant you that this will be few and far between, but it is still possible.
Thanks Leevena! You are correct.
I don't think that is accurate.
If over 50 FTE's, and NO group, then the 2k penalty WILL happen regardless of someone gets a subsidy or not. Also, the first 30 FTE's are not penalized, only the number above 30.
If over 50 FTE's, and YES group, and 1 employee gets subsidies due to not offering "affordable" coverage, the penalty is $3000 for every employee above 30 FTE's.
If over 50 FTE's, and NO group, then the 2k penalty WILL happen regardless of someone gets a subsidy or not. Also, the first 30 FTE's are not penalized, only the number above 30.
If over 50 FTE's, and YES group, and 1 employee gets subsidies due to not offering "affordable" coverage, the penalty is $3000 for every employee above 30 FTE's.
I had thought that too, Bill, but after Leevena corrected me I looked online and saw that he is right. (note that originally I had put the 30 person exclusion in the wrong spot, then I edited my original post.)
It appears that no penalty is triggered (even for employers that do NOT offer coverage) unless at least 1 full-time employee goes to the exchange and gets a subsidy.
The $2000 penalty for NO group plan is assessed on every full-time employee (less 30), even if just 1 employee got a subsidy in the exchange. The penalty for an Employer WITH a group plan is $3,000 for each employee that actually gets a subsidy in the exchange, but not more than the penalty described above for Employers with NO group plan. Of course, there are some smaller provisions like the new safe harbor rule.
Sites from several experts had summaries of the law, and I can't find one from IRS or HHS that specifies it exactly, so maybe one of you can. In the meantime, a pretty easy to read flow chart from Kaiser is found at Employer Responsibility Under the Affordable Care Act - Kaiser Health Reform
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