In 2014, the employer mandate portion of the Patient Protection and Affordable Care Act (PPACA) will take effect. You may already be familiar with the details surrounding this mandate, which requires qualified employers to provide their full-time employees with health insurance coverage. For those of who who aren't, here's what you need to know in a nutshell:
When the mandate of employer-provided health insurance takes effect, the PPACA will require all "large employers" to provide qualified health care coverage to all full-time employees or be subject to possible penalties.
Here are some definitions that might help you understand this more fully:
- "large employer": If your Full Time Equivalent (FTE) employees total 50 or more, you are considered a "large employer"
- FTE employees: The number of FTE employees is an aggregate number used solely for the purpose of defining whether an employer qualifies as a "large employer" or not. This number is determined in 2 steps:
- Taking the total hours worked by non-full-time employees for a given month and dividing that by 120
- You then add that number to the number of full-time employees you employed for that month. The result is your total FTEs
- Full-time employees: Full-time employees are defined as employees who, in a given month, have worked an average of 30 hours or more per week.
Here are some links you might find useful:
- Government site which includes the actual details of the law
- Handy calculator of penalties
- Wikipedia article: Patient Protection and Affordable Care Act
There are also potential tax credits you could take advantage of, if you qualify. In order to receive the full benefit of a 50% premium subsidy, your business must have an average payroll per FTE employee of no more than $25,000 and have no more than 10 FTEs (not including owners). The subsidy is reduced by 3.35 percentage points per additional employee and 2 percentage points per additional $1,000 of average compensation. As an example, a 16 FTE firm with a $35,000 average salary would be entitled to a 10% premium subsidy.
The process of putting in place the structure of the new law in each state makes the exact timing of the implementation uncertain. While the true details of how these changes will be applied (and when) will emerge over time, Rosemark gives you a tool that makes your FTE situation clear right now.
From within the Rosemark Web App, simply go to the Home screen, click on Statistics and Reports (bottom left area) and click on Full Time Equivalent Report.
img. 1 - FTE Report
Note that, at time of writing, Rosemark uses the pay/bill hours to make these calculations. This can skew numbers for Live-in cases if you are counting them as less than what your State requires. For example, if your live-in Service Types count shifts as 1 per 24 ("daily rate"), the FTE's for those caregivers would be artificially low. We will be adding additional controls very shortly to allow you to account for that. If you have any questions at all about this, please call us at 734-662-3537.