ACA for Part-Time Employees: What Employers Need to Know on Health Insurance
Health Insurance Requirements for Part-Time Employees
If you’re a business with part-time employees, you might wonder what options you have for them in terms of health insurance coverage. Many employers don’t offer part-time health insurance, but what if you want to? Or you’re curious what rules are in the Affordable Care Act for part-time employees?
Even though the ACA has been in effect for several years, navigating the details of offering health benefits is still a challenge. Here’s what you need to know about the ACA and part-time employees.
How the ACA Defines “Part-Time”
Businesses typically view a full-time employee as someone who works 40 or more hours per week. Anyone who works less than that is considered a part-time worker.
The ACA has a different definition. The law uses a threshold of 30 hours a week, so you may be required to treat an employee who averages 35 hours a week as full-time staff.
This is an important distinction as you examine your duties under the ACA.
Does the Law Apply to Your Business?
The Affordable Care Act has requirements for businesses that have 50 or more full-time equivalent employees (FTEs).
To determine how many FTEs are on your staff, start with those who work 30 or more hours a week. These count as one FTE each. Then, add up your part-time hours (below 30 per week) and divide by 30. You’ll add that to the full-time count for your total.
For instance, if 10 employees work 35 hours per week and 10 others work 10 hours per week, you get:
10 FTEs + (100/30) = 13.33 FTEs
Another way the ACA requirements might apply to you is if you’re an Applicable Large Employer (ALE). This is based on your staffing for the previous year. If you had at least 50 FTEs on business days during the previous calendar year, you also have obligations under the Affordable Care Act.
Do the Health Insurance Requirements Apply to Part-Time Employees?
As an employer, you’ll notice that the legal requirements under the ACA are only that you must offer qualified health insurance plans to at least 95 percent of your full-time employees (or those that work 30 or more hours per week). You are not required to offer health benefits to part-timers.
However, that doesn’t mean you shouldn’t offer health insurance to your part-time employees. If you have any concern that due to additional hours during peak times your employees may move from part-time to full-time under the ACA, you may want to offer health insurance to make sure you comply.
Additionally, you may work in an industry where it’s difficult to attract and retain talent, even among the part-time staff. In this case, it can be very beneficial to offer health insurance benefits to all your employees. Outsourcing to someone like Integrity Data to help with ACA reporting services makes it easy.
Where to Find Affordable Health Insurance
If your company has less than 50 FTEs, you are not required to offer a health care plan, but may want to anyway. What’s the best way to do it?
The Affordable Care Act established the SHOP marketplace so smaller employers — those with less than 100 FTEs — can find inexpensive qualifying coverage. If you have less than 25 FTEs and use SHOP to provide health insurance for your staff, you may also qualify for tax credits.
If you have more than 100 FTEs, you can compare health care plans and prices from traditional group health insurance plans. Most group insurance plans have considered the ACA requirements, so you should have no trouble meeting the minimum standards.
Many companies do offer health care benefits to part-time employees, however they typically will include a smaller contribution from the the employer, and less robust coverage. Some of these employers include Starbucks, UPS, Costco, and Lowe’s. If you’re not sure if your employer offers this, it doesn’t hurt to ask!
Many employers also allow extending health benefits to a spouse. So if your employer doesn’t offer insurance to you, perhaps you can sign up on a plan with your spouse through their employer.
Lastly, you should look into individual health insurance plans via private insurers, or your state’s public ACA Exchange site, also known as the Health Insurance Marketplace. When applying on the Marketplace, you fill out an application, and then your eligibility to qualify for one of these plans will depend on income, household members, and other information. Some applicants may even qualify for a premium tax credit.
If you do purchase an individual health care insurance plan, check with your employer to see if they offer an HRA (health reimbursement arrangement). If they do, and you qualify, it could help cover insurance premium costs. Even a small reimbursement helps!
Stay in Compliance with the Affordable Care Act by using Integrity Data’s ACA Services
If the ACA requires you to provide health insurance to your full-time employees, you need to keep great records so you can prove you were compliant throughout the year.
Unfortunately, you probably have other factors to consider, especially in a smaller business. Affordable Care Act requirements for part-time employees can be more tricky and time-consuming. It’s difficult to find the time to update records for insurance each month. But we can help.
With Integrity Data’s hassle-free reporting services, you can stay up to date with the government without spending time and energy worrying about it. Don’t try to stay on top of your reports on your own. Let us help you with the accuracy of your data and keep you in compliance.
From monitoring small details to webinars that help you understand the ins and outs of the law, we have everything you need to manage your ACA compliance quickly and easily. Contact us for more information today!
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