The employer mandate of the Affordable Care Act kicks in Jan. 1, 2016. Businesses with an average of 50 or more full-time-equivalent employees must offer health care insurance to their workers. That health care may not cost the employees more than 9.5 percent of their income.
Here is a checklist of actions to take between now and then:
• Give notice. Since Oct. 1, 2013, employers large and small that are subject to the Fair Labor Standards Act are required to issue written notices to employees about the existence of federal and state health care exchanges and how to access them. Employers must be able to prove they have provided this information.
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• Start counting. As of Jan. 1, 2014, employers need to record employee hours — full time and part time. Full time is defined as 30 hours a week or more. Counting hours is particularly important for businesses that may be on the cusp of being considered large or small employers under the law. The ACA has a specific formula for counting employee hours:
1. Determine for each calendar month how many employees worked 130 hours. That will be the number of full-time workers for that month.
2. Add together the hours of all other employees, but do not count more than 120 hours per person. Divide the total hours by 120. The figure is the full-time-equivalent number of your non-full-time employees.
3. Add the number of full-time employees and the number of equivalents to derive the total number of full-time-equivalent employees.
4. Do this every month throughout 2014. In December, add up each month’s total FTEs and divide by 12. If the average number of FTEs is 50 or higher, an employer will be considered a large employer and subject to complying with the employer mandate under the ACA.
• Analyze schedules. While counting employees, conduct a hard analysis of scheduling. Are employees working the right shifts? Are they working the right amount of time? Is it better to transition more to full-time or to part-time hours? Will service be affected? Is more training needed? The ACA does not afford employers the luxury of being lax about employee hours.
• Beware the Ides of March. The ACA requires everyone to have health insurance. If an employer does not offer coverage, individuals must seek their own insurance. Open enrollment to obtain insurance coverage for 2014 through state and federal healthcare exchanges ends March 31. Restaurant owners should be sure they have obtained their own coverage and submitted an application, preferably by March 15. Individuals that do not receive coverage for 2014 face tax penalties of $95 or 1 percent of their income, whichever is greater. Open enrollment begins again Nov.15 for 2015.
• Call in experts. Tap health insurance brokers to look for medical plans that make the most economic sense for your business. Find those brokers who understand the ACA and its employer mandate.
• Use resources. Several trade organizations, including the National Restaurant Association and International Franchise Association, have posted ACA-related information, materials and links on their websites. Healthcare.gov, the government website for the ACA, also offers a lot of information.
Sources: National Restaurant Association, International Franchise Association, Healthcare.gov