It’s no secret that the Affordable Care Act requires many employers to provide health insurance coverage to their full-time employees or pay a tax penalty. Beginning in 2015, employers with 50 or more full-time employees must offer health insurance to full-time employees working an average of 30 or more hours per week. If the coverage minimum requirements aren’t met, then the employer could possibly face a non-deductible tax penalty. With the Affordable Care Act going into full swing, don’t get caught in these “pay” or “play” traps. Fair warning, they are pretty risky. You could be potentially risking your business, your employees, and your business expenses!
Trap 1: Avoiding Hours of Service
Before we go too deep into detail, let’s give you a brief definition of what “hours of service” actually are. An hour of service is any hour which an employee is paid or entitled to be paid. Included in these hours are when the employee is actually working and the hours when the employee isn’t present in the workplace, but are still entitled to be paid. Hours such as paid holidays and paid vacations. It’s mandatory that the employer counts each and every hour of service to determine the number of full-time equivalents in order to predict the employer’s size. Counting hours of service can also be difficult for certain employees. It’s advised and highly important that you don’t just record employees when they are present at work, but also the times such as paid holiday and paid vacation.
Trap 2: Categorizing full-time employees as seasonal
For starters, placing your employees in the category seasonal when they really aren’t is a poor employer practice. If your employee agrees to a certain position whether it’s seasonal, full-time, or part-time, then that particular position is what they’ll be expected to work. Now before you think that you’re actually fooling the system, take a second to think about the difference between full-time and seasonal employees. A seasonal employee is an employee whose employment is 6 months or less. Their position also begins commonly around the same time each year. Just that season right? If you categorize anyone of your employees as seasonal and they really aren’t, you’ll be following the employer mandate incorrectly.
Those full-time employees should be offered coverage for working full-time. This protocol is a very risky one, you’ll end up paying for your decisions legally and your employees will feel like they’re not working in a trusted environment if they catch wind that you misclassify them just to avoid penalties. Whatever you do, don’t risk the people who make your business your business. Please, by all means, treat them right! Don’t put your business at risk. Play your cards right and just simply follow the rules. You’ll thank yourself in the long run.
Is your staff prepared to move forward with you? Hope so! If not, that’s where a staffing agency becomes your new best friend. Perhaps you need some temporary employees. When you choose to work with a staffing agency, you leave those worries behind about paying for healthcare. Because staffing agencies already have that covered. You’ll get your employees and won’t have to worry about the extra fuss.
Contact us today to work with an experienced staffing agency. We have an amazing Job Search page that makes it easy to both share and find open positions. You can learn more about our staffing services here. We look forward to hearing from you soon!