See if you know what you need to at this point about the rules, regulations and obligations of the Affordable Care Act that take effect in less than a month.
1. When do businesses with between 50 and 99 full-time (or full-time-equivalent) employees have to start offering insurance?
C. These companies are not required to offer health insurance
2. What is a full-time-equivalent employee?
3. True or false: You have to insure part-timers?
4. In most cases, how long does someone have to work before he is eligible for health insurance?
5. What is the fine for not offering insurance to full-timers?
A. $2,000 per year
B. $2,000 per employee
C. There is no fine
6. What does the ACA consider to be “adequate” and “affordable” insurance?
1. B. If you have 100 or more full-time equivalent employees, you’ll have to offer health insurance to at least 70 percent of full-timers in 2015. If you have between 50 and 99, you’ll have to offer it to at least 95 percent in 2016.
2. A measure of employee hours to see if you qualify as a large employer. Full-time employees work at least 30 hours a week. You must offer them insurance, if you’re large enough for the employer mandate. But how do you tell whether you’re large enough? That’s where full-time-equivalent employees come in. Add up the average weekly hours of your part-timers and divide by 30. Then, add it to your number of full-timers.
How to do the math: You have 20 full-timers, plus 60 part-timers working 20 hours a week. 60 x 20 hours = 1,200 hours. Divide by 30 = 40. Add your 20 full-timers and you have 60 FTEs. Come 2016, you’ll fall under the mandate.
Be aware that the IRS offers a choice of methods for calculating part-time hours. If your workers’ hours fluctuate or you have a lot of seasonal workers, one of the alternate methods might net you fewer FTEs.
3. False. But if you do decide to insure one part-timer, you must offer insurance to all.
4. 90 days. In most cases, someone must work 90 days from the start of their full-time job to be eligible for health-insurance coverage.
5. B. The fine is $2,000 for every full-timer over 30 employees, if you don’t offer any kind of insurance. If you offer it, but it doesn’t meet the standards for adequate and affordable coverage, your workers can go to the public exchanges and get subsidized by Uncle Sam. In that case, you pay $3,000 for every full-time worker who gets a subsidy, but not for any who don’t. To avoid both fines (which the IRS calls “shared responsibility payments”), you must offer adequate and affordable insurance to all full-timers.
6. To be adequate, it must cover at least 60 percent of the average worker’s health-care expenses. To be affordable, the worker’s share of premiums can’t be more than 9.5 percent of his household income. If you’re unsure whether your plan meets either standard, check with your insurer.