Chronoblog
Category: Affordable Care Act (ACA) Obamacare
Obamacare Q & A: Must Offer ‘Affordable’ Coverage

Our guest blogger, Matt Lapointe, helps to explain the ‘Affordable’ concept in the Affordable Care Act (ACA).  Matt Lapointe, is an attorney with Wetherington Hamilton, P.A. in Tampa, FL,  www.whhlaw.com.  Matt advises small and mid-size businesses on all areas of business law, including the ACA.

Q.  I own 5 Dunkin’ Donuts franchises. Each is in a separate LLC, but I know they must be grouped together for ObamaCare purposes under the aggregation rules you discussed in Part 1 of ObamaCare Q & A.  I offer health coverage to all my full-time employees, but I heard that I could still get fined if the coverage I offer is not affordable to my employees.  How does the ACA define “unaffordable”?

A.  Health insurance coverage is deemed “unaffordable” if the premium required to be paid by the employee exceeds 9.5% of the employee’s household income.  Recognizing that an employer has no way of knowing the “household” income of its employees, the regulations allow affordability to be determined on the basis of the employee’s own income as reported on his or her Form W-2 (in Box 1) instead of household income.  If any employee’s share of the premium exceeds 9.5% of her W-2 reported income and any employee obtains subsidized coverage from the ObamaCare exchange, then the company must pay a penalty of $250 per month ($3,000 per year) multiplied by the number of full-time employees who obtain subsidized coverage from the exchange.

We’ve mentioned our new ACA-ALE Status report that calculates by month the total number of full-time and full-time equivalent employees to determine if your company must comply with the ACA. ACA FT Status

Our other new ACA report, ACA: FT Status – Monthly, breaks down each employee’s hours by the month to point out which employees meet the full-time (FT) status according to the ACA 130-hours per month ruling.

(These new ACA reports are coming out with our next update.)

We would like to thank Matt again for his time as a guest blogger in this series and for his assistance in creating our new ACA reports. As we’ve mentioned before, the Chronotek staff does not have ACA experts and therefore cannot answer compliance questions. Feel free to contact Matt.  We may hear from Matt again. Please stay up to date by subscribing to our blog or follow us on Facebook or Twitter.

 

Obamacare Q & A: Does Your Company Qualify – ALE

It’s a daunting task to determine if your business is required to comply with ObamaCare’s Affordable Care Act (ACA). In this third post of our series, ObamaCare Q & A, our guest blogger, Matt Lapointe, an attorney and ACA expert with Wetherington Hamilton, P.A. in Tampa, Florida, will clarify the definition of an Applicable Large Employer (ALE). Matt also helped us create a new report, ACA-ALE Status to crunch the numbers. Thanks Matt, for this ALE Q & A session.

Q.  My office cleaning company has 60 part-time cleaners who work on average 20 hours per week.  I also have 10 full-time supervisors, 3 full-time office staff (including my husband and me) and 2 full-time sales people.  I know that ObamaCare’s Employer Mandate applies to companies with 50 full-time employees.  We only have 15 full-time employees, so ObamaCare doesn’t apply to us, right?

A. WRONG.  To determine whether an employer is an “Applicable Large Employer” or “ALE” the ACA rules require you to convert your part-time employees to “full-time equivalents” or “FTEs.” Under the ACA, “full-time” is 30 hours per week or more. To calculate your FTEs, you take the total number of hours worked by all your part-time employees in a particular month and divide by 120.  In your case, assuming each of your 60 part-timers worked 20 hours per week in a particular month (60 x 20 x 4.3), the total hours worked for that month would be 5160.  Next you divide the total hours for the month by 120.  In your case, 5160/120 = 43 FTEs.  Adding 43 FTEs to the 15 full-timers, you end up with a total of 58.  You need to perform these calculations for every month of 2015 to determine whether, on average, your cleaning company employed 50 or more full-time employees over the course of the year.  If it did, your company is subject to the Employer Mandate.  Here is a chart that demonstrates the necessary calculations:

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
FT 15 15 15 15 15 15 15 15 15 15 15 15
PT/FTEs 43 45 47 45 41 35 33 31 35 37 39 40
Total 58 60 62 60 56 50 48 46 50 52 54 55

12 month total = 651

Monthly Avg   651/12 = 54.25 = 54

Because 54 >50, the Employer is an ALE.

 

 

ChronotekACA-ALEReport

Chronotek has a new report, ACA- ALE Status, that helps to simplify the process of pulling together and understanding the numbers for customers of our telephone timekeeping system.  As Matt mentioned, it’s important to remember that your definition of full-time is quite different from how the ACA determines your company’s full-time and full-time equivalent count. Our new report compiles these numbers automatically.

In our next post in this series, Matt will explain the meaning of “Affordable” in the Affordable Care Act.  It’s not a random or subjective term and all ALE companies need to understand it’s specific directives. Stay informed.  Subscribe to this blog or follow us on Facebook or Twitter.

 

 

 

 

ObamaCare Q & A: 50 Employee Rule Defined

The Affordable Care Act 50 employee rule is cause for some discussion.  In our last post we introduced Matt Lapointe, who is an attorney with Wetherington Hamilton, P.A. in Tampa, Florida.  Matt is an expert on the Affordable Care Act (ACA) and it’s our privilege to host him as a guest blogger in our ObamaCare Q & A series. He will address vital questions to help prepare small businesses on ACA requirements.  Matt’s first blog deals with an explanation of the 50 employee rule.

Q.  I know that ObamaCare’s Employer Mandate requires employers with 50 or more employees to offer health coverage to their full-time employees starting on January 1, 2016.  My wife and I each own 50% of two different LLCs – my interior design business and her plumbing company.  The interior design business has 15 employees and the plumbing company has 38 employees.  Because both companies are under 50, we don’t have to worry about the Employer Mandate, do we?

A. YES YOU DO.  Under the ACA, companies that have common ownership or are otherwise closely related are aggregated for the purposes of determining whether or not they employ at least 50 full-time employees. This “aggregation rule” in the ACA piggybacks on two established tests codified in Section 414 of the Internal Revenue Code dealing with “controlled groups” and “affiliated service groups.” If two or more companies meet the “controlled group” test or the “affiliated service group” test and the combined total of employees meets the 50 employee threshold, then each separate company is subject to the Employer Mandate even if the separate companies do not individually have enough employees to meet the threshold.  Because your two companies are commonly owned by you and your wife and because both companies combined employ a total of 53 employees, each company is subject to the Employer Mandate.

Thanks, Matt. This is valuable information and probably surprises many small business owners.  As we mentioned in our last post, we aren’t ACA experts at Chronotek, and will not be able to answer ACA questions.  We leave that to the legal advisors like Matt.  However, we will soon be releasing 2 reports to help customers of our telephone timekeeping system.  Our ALE Status (Applicable Large Employer) report calculates by month the total number of full-time and full-time equivalent employees as deemed by the ‘new’ numbers. This report can assist with determining the 50 employee ruling that Matt addressed today. Please remember that if you have more than one Chronotek account, you will need to combine the totals from both accounts.

In our next post Matt will address the very tricky issue of calculating the “real” number of full-time equivalent employees for ACA purposes. Don’t miss it. Subscribe to this blog or follow us on Facebook or Twitter.

ObamaCare Q & A Series

We’ve been preparing for it. The Affordable Care Act (ACA) is imposing new numbers on small businesses.  Like death and taxes, it’s something we’d like to avoid, but unfortunately we can’t.  The best alternative is to be prepared and gain an understanding of its implications for your business.

In our new blog series, ObamaCare Q & A, we’re going to hear from Matthew Lapointe, who is an attorney with Wetherington Hamilton, P.A. in Tampa, FL,  www.whhlaw.com.  Matthew advises small and mid-size businesses on all areas of business law, including the Affordable Care Act.

Matthew will conduct a series of Q & A’s on ACA compliance to give us insight on who must comply and who doesn’t. He also consulted with us as we developed two ACA reports that will be released soon.  We aren’t ACA experts and will defer any questions that you have to your own legal advisors, but our reports will help compile and organize relevant data for companies who use our telephone timekeeping system for their remote employees.

Please check back with us soon for our first Q & A installment in which Matthew will address the ACA compliance issues of owning multiple businesses.  You can also subscribe to our blog or follow us on Facebook or Twitter to keep up with all new posts.

Have more questions? Let's talk!
Support M-F 8am-6pm EST
Call 800-586-2945 LIVE CHAT