Federal Health Care Reform: Large Group Eligible Employers and Moving into Safe Harbor (Part II)

Hospital - 4 ways to know if you are an large group employer, and 3 ways to move your business to Safe Harbor

For employers with 50 or more employees, there will be some penalties assessed for failure to comply with certain aspects of the new federal health care law.  However, there is light at the end of the tunnel and luckily that tunnel just got longer! The Obama Administration moved the “Pay or Play” provisions deadline to January of 2015.  Although the deadline has been moved, it is prudent for large group eligible employers to begin looking at their policies and contribution strategies now so they can formulate a tracking system of part-time employees to minimize their penalty exposure. There is also a way for employers to move into safe harbor and avoid these tax penalties if the employer continues to provide group-sponsored private health care coverage.

See also: How much do you know about ACA? Take the Quiz!

Who qualifies as a large group eligible employer?

Wondering if you count as a large group eligible employer? Here are some guidelines that can help:

  1. In this case, employers are determined to be “large employers” when they have 50 or more full-time or full-time equivalent employees who work more than 30 hours a week or 130 hours of service in a calendar month. (Note that Florida define a full-time employee as someone who works 25 hours a week as opposed to 30 hours)
  2. The calculations for eligibility do include the number of all part-time workers.
  3. The use of part-time employees ONLY applies for calculation purposes to determine if you are “large employer” eligible. It does not require that you combine part-time employees in some manner in order to force an employer to provide coverage for part-time employees.
  4. If an employer keeps all part-time employees at, say, less than 22 or 23 hours per week (to be on the safe side), the employer will NEVER have to include those part-time employees as eligible for health insurance benefits.

How to Move to Safe Harbor

There are at least three things that can move you and keep you in safe harbor:

  1. If an employer provides what is medical insurance that meet minimum essential coverage, then they are one step closer to safe harbor.
  2. If an employer contributes sufficient amounts to the employee-only premium where the employee does not have to pay more than 9.5% of their income (as determined by their W-2) towards these premiums, then the employer remains in safe harbor.
  3. Any employee eligible for an employer-sponsored private health care plan that is “affordable” and “meets minimum essential coverage” will not be eligible for any tax subsidies.  Employer stays in safe harbor.

Do you know if you qualify as a large group eligible employer? Are you planning on moving to safe harbor? Let us know!

See also: Federal Health Care Reform and Penalties (Part III)

 

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