Thursday, September 20, 2012

YOU NEED TO KNOW THIS! DETERMINING YOUR FULL-TIME EMPLOYEES

IRS Notice 2012-58  is aimed at employers with more than 50 full-time employees and solidifies how employers are to determine whether an employee is full-time or part-time.  A full-time employee, for health reform purposes, is defined as someone who works, on average, 30 hours or more per week.  This number is important for several reasons but mainly if you should be offering them health coverage and if they could count against you if you are penalized for either not offering minimal essential coverage or if your health plan is deemed unaffordable.

Often-times employers will bring employees on board as a part-time employee and through shift changes or picking up hours here and there become full-time but still labeled part-time.  The IRS is going to be looking at these employees very closely as to whether they should have been considered full-time.  The way they are going to do this is specified in the link above but a synopsis is located below:

Ongoing Employees (Safe Harbor)

1) For ongoing employees (employees who have been working for at least one standard measurement period), employers "Look-Back" over a period of "Standard Measurement" of at least 3 months but no more than 12 Calendar months to determine average weekly hours.

2)  Those employees who average more than 30 hours during this "Standard Measurement Period" or "Look-Back Period" are considered full-time.  Employers may take an (Optional) "Administrative Period" of no longer than 90 Days to bring them into full-time benefits.

3) Following the Look-Back Period", starts the "Stability Period" which is at least 6 months long and no shorter than the "Standard Measurement Period".  During the stability period the employee remains either Part-Time or Full-Time based on their determination, even though they may have moved back into Part-Time or Full-Time status.


Newly Hired Employees, Variable and Seasonal (Safe Harbor)

1) Similar to ongoing employees, Employers may use an initial "Measurement Period" of at least 3 months but no more than 12 months to determine average hours, and an (Optional) administrative period of no more than 90 days to bring that employee on board as full-time eligible if they meet the Full-Time criteria.

2) The "Stability Period" must be the same length as the "Stability Period" for ongoing employees.

3) The rules for the "Stability Period" are the same for Newly Hired and Ongoing Employees.


This requirement under health reform appears to be aimed at those 50+ employers who are thinking that they may be able to avoid penalties associated with not offering minimal essential coverage or unaffordable coverage by hiring more part-time employees.  The fed needs their penalty income to pay for health reform so one way or another they will get it.  Unless you plan on bringing a part-time employee on full-time, keep them under 30 hours per week to avoid any potential fines.










Wednesday, September 19, 2012

HEALTH REFORM (PPACA) COMPLIANCE....SAVE THE DATE!!

So here we are, on the heels of a presidential election, a bit over a year away from the full effects of the Affordable Care Act (Health Reform) and employers need to make sure they are remaining compliant or it could cost, a lot.  Below is a time-line and essential changes that you may want to earmark.  In past posts I have shared these with you but thought were important enough for a re-visit.

2012

1)  August, 2012-Rebates will be issued by insurers if medical loss ratio is less than 80% in small group market and 85% in large group market.  Rebates will be issued at the employer level.  

2)  August, 2012-Non-Grandfathered Health plans will be required to offer coverage for Gestational Diabetes Screening and Contraceptive for non-religious, non-exempt employers.

3) Summary of Benefits Coverage (SBC)-Applies to first Open Enrollment period after September 23, 2012.  Insurers and Plan Administrators must provide a summary of benefits and coverage to employers and plan participants.  For employer groups the responsibility to get these to the employees relies primarily on the employer.  Under this provision, there is a 60 Day Advance Notice of Material Change where carriers must provide a 60 day advance notification if any material changes to the coverage are to go into effect.

4)  October, 2012-Comparative Effectiveness Fee-Plans that began after 10-2-2011 will be required to pay $1 per covered life for research to determine effectiveness of medical treatments. This is the portion of the law that concerned a great many people as they believed that these panels would undermine life saving care in place of cost savings.  This fee goes up to $2 per life in 2013 and supposedly goes away in 2019.


5)  Jan, 2013-Flexible Spending Account (FSA) spending limits capped at $2500 for Individual and $5000 for family.  Cap applies to plan years that began after December 31, 2012.

6) 2012 Tax Year-W-2's distributed in 2013 for tax year 2012 for employers who issue more than 250 W-2's will be required to include the total cost of group medical coverage.