By this point, every company knows what they have to do to comply with healthcare reform, right? A new study says that might not be the case.
More than 55% of employers with 50 or fewer employees believe they’ll have to provide health insurance for their employees come next year or pay a fine.
If that sounds off to you, that’s because it is — the fine for not providing health care to staff members only applies to companies with 50 or more employees working at least 30 hours a week (or an equivalent number of part-time staff).
The stats come from a new eHealth, Inc. survey of 259 business owners, many of whom had 10 or fewer employees — way fewer than the minimum required under the mandate, as Businessweek noted.
That’s no surprise, maybe — healthcare reform is an incredibly complicated piece of legislation. A Pew poll from last summer found that just a little more than half of respondents understood the Supreme Court’s decision.
Who’s a large employer under healthcare reform?
So how do you know if your company has to provide health care to staff next year or face a penalty? It’s a bit complicated, but Jewelie Grape from Benefits Notes has put together a stellar summary of how to determine if you’re a large employer.
For each month in the preceding calendar year, do the following:
- Calculate the number of full-time employees, including seasonal workers (those working an average of 30 hours of service per week). [For example, you employed 39 full-time employees in January.]
- 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). [For example, all of your non-full-time employees worked 1,260 hours in January / 120 = 10.5 FTEs in January.]
- Add 1 and 2 to determine your total full-time employees (including FTEs) for the month [39 + 10.5 = 49.5 FTEs in January]
- 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.