One crucial aspect of the Affordable Care Act is the employer mandate to offer health insurance.

Though this was supposed to go into effect at the beginning of 2014, the Obama Administration

delayed it until 2015, citing the difficult paperwork requirements being imposed on businesses.

Most people with a passing familiarity with the ACA understand that the employer mandate

requires businesses with 50 or more full-time employees to offer health insurance. While this is

a good shorthand for what the law does, it is also a slight misinterpretation. Delve deep into the

text, and you'll note that the law does not actually count 50 full-time employees, but rather 50

full-time equivalents.

There is a crucial difference. For the purposes of this law, the IRS considers a full-time employee

to be one who works 30 hours per week or 120 hours per month or more. However, two part-

time employees working half that amount each will be considered one full-time equivalent, or

FTE. If you compensate employees not on time but on piece work it gets even more

complicated!

In other words, a business with 30 full-time employees and 60 part-time employees may

actually have to offer insurance (though it should be noted that they are only required to offer it

to the full-time workers). It is crucial that small business owners understand this before 2015

filings are due.

The rollout of the ACA may change how some businesses schedule employees, and it will be

important for them to schedule accurately so they are not surprised by unforeseen insurance

requirements. Using PriorityHR’s time and attendance system is a highly-effective tool that can

be used to carefully track hours and determine exactly where you stand. Don’t take chances!