The deadline for "large" companies to provide health insurance to its employees is fast approaching, with the requirement laid out under the Affordable Care Act – commonly referred to as Obamacare – set to go into effect for 2014 plans. That means that decisions about those plans will have to be made in the next few months.
The definition of large under the ACA for coverage is "50 full-time equivalent" employees. But what about companies that rely on seasonal workers; how do they fit into the determination of whether a company is large or small?
According to Kevin Kuhlman, manager of public affairs for the National Federation of Independent Business, it depends. Seasonal workers must be included in the monthly calculations for full-time equivalency, and if the total exceeds 50 full-time-equivalent workers, you may be on the hook for providing coverage.
But the ACA also includes a "seasonal worker exception." If your full-time-equivalent employee count during the prior calendar year only exceeded the threshold of 50 on 120 or fewer days and the only reason that threshold was passed was because of those seasonal workers, your company is not considered large.
In other words, if your seasonal employees truly are "seasonal" – and the government is trusting you to "reasonably and honestly classify" them as such – they won't be the determining factor of whether your company is large or small.
Keith McMurdy offers some tips from the Employee Benefits Legal Blog for Fox Rothschild LLP for "dealing with the seasonal employment issue":
- Clearly define which of your workers are seasonal – and make sure they're aware of the classification.
- Limit employment to a truly seasonal period (fewer than 120 days).
- Clearly designate them as seasonal – and have the documentation to show it – when calculating company size for compliance.
And don't try to understand everything alone. Make sure you consult with your insurance broker and/or your lawyer to make sure you are in compliance with the ACA.
For more on the impact of Obamacare, read:
Obamacare Penalty May Not Be Worth the Savings
Tip: Find Creative Ways to Lower Health Care Costs
The Practical Implications of ‘Obamacare’ on Distributors
