The Patient Protection and Affordable Care Act obligates "applicable large employers" to provide affordable, minimum essential health insurance to full-time employees beginning January 1, 2014. Following are 2 of the 4 steps you can take now to prepare:

1. Select a look-back period in 2013 to determine the "applicable large employer" designation for 2014.

2. Count employees and calculate the designation based on a current snapshot to prepare for the official count and designation after the measurement period.

Select a Look-Back Period
Applicable large employers are subject to the Act. These employers have 50 or more full-time and full-time-equivalent employees on business days during the preceding calendar year.

Most employers’ designation will be evident without doing calculations – those well over or significantly fewer than 50 employees can easily tell whether the Affordable Care Act applies to them. If the employer has close to 50 or has a combination of full- and part-time employees, it's essential to carefully calculate the applicable large employer designation.

During the transition year of 2013, employers can choose any consecutive 6-month period (rather than the whole calendar year) as the “look-back period” for calculating their employer designation. This designation applies for the calendar year 2014. For example, a company can choose March through August as the look-back period for measurement. If calculations reveal 50 or more full-time and full-time equivalent employees, then the company has September through December to evaluate or make healthcare arrangements for its employees.

Calculating Large Employer Status
Employees are considered full-time under the Act if they are paid on average 30 or more hours per week during a month. Alternatively a monthly average of 130 hours or more can be used.

The number of full-time equivalents (FTEs) is the average number of hours worked by part-time employees in a month divided by 120. Add the number of FTEs to the number of full-time employees. If this sum is 50 or greater, then the organization is an applicable large employer.

Our Attendance on Demand system does the work for you. It allows employers to view different look-back periods, see a snapshot in time, and document their applicable large employer status, online any time. The next issue of our newsletter will cover steps 3 and 4 concerning measuring and reporting on full time employees using timekeeping to prepare for the Affordable Care Act.

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