New Study Finds Many Companies Still Uncertain on PPACA Compliances
A new study of 259 small-business owners from eHealth, Inc., including a number of small businesses with 10 or fewer employees, has found that about 55 percent of small business (50 or fewer employees) owners think that they will owe a fine to the federal government should they not provide health insurance to their employees next year. In reality, the new penalty structure is only applicable to businesses with over 50 employees working at least 30 hours per week.
This lack of understanding is unsurprising. A Pew poll last year found that barely one half of employers actually understood the Supreme Court’s decision on healthcare reform. And while the reform bill is very complicated, determining whether or not a business is considered large has been simplified by Benefits Notes, which has constructed a summary to determine company size. The steps summary includes:
1. Calculate the number of full-time employees, including seasonal workers (those working an average of 30 hours of service per week).
2. Calculate the number of FTEs, including seasonal workers (which takes into account the total number of hours of service – but not more than 120 hours of service for any one employee – for all employees not employed on average 30 hours of service per week for that month / 120).
3. Add 1 and 2 to determine your total full-time employees (including FTEs) for the month.
4. Do this calculation for each month, then add all of the FTEs for the entire year and divide by 12, dropping the fraction. If this number is 50 or more, you are an applicable large employer and will be responsible for complying with the employer shared responsibility mandate.