Counting Hours Is Crucial To Comply With ACA’s Employer Shared Responsibility Provisions

While the Patient Protection and Affordable Care Act’s (ACA) employer shared responsibility provisions have been delayed until Jan. 1, 2015 (and for some plans, 2016), a recent article has emphasized the importance of beginning to count employee hours to determine which employees are considered full-time under the law.

Background. The ACA assesses payments on certain large employees with 50 or more full-time employees that do and do not offer health coverage. For employers that do offer health coverage, the coverage must be both affordable and provide a minimum value. Under the ACA, a full-time employee is defined as one working more than 30 hours per week—and this is problematic for some employers who have historically defined full-time employees as working 40 hours or more per week.

Crunching the numbers. A recent article from human capital management provider Ceridian, Crunching the Numbers: Employee Hours and the Affordable Care Act, noted that even though the employer shared responsibility provisions were delayed for one year, “now is the time for employers to take a closer look at their human capital management topography and start re-evaluating employee health benefit strategies well before mandates take effect.” Ceridian provides three steps to effectively count employee hours to comply with the ACA:

1. Accurately collect and categorize service hours. Full-time status should be based on a calculation of average service hours under the ACA. Ceridian recommends implementing an effective time tracking application to properly categorize service hours.

2. Identify benefits-eligible employees. Once determining employee service hours, employers should determine which employees are considered full-time under the ACA (30 hours per week). Employers may establish a measurement period for determining full-time status, which can be anywhere between three and 12 consecutive months.

3. Proactively manage employee average hours. Ceridian recommends that all front-line managers need to be educated on the ACA full-time requirements to correctly schedule employees and approve time cards.

For more information on the Ceridian study, visit http://www.ceridian.com/resources/newsletters/2014/Feb/crunching-numbers-employee-hours-and-aca.html.

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