April 2014 Health Care ReformPosted on: April 1, 2014Categories: HR & Compliance
The Affordable Care Act (ACA) penalizes large employers that do not offer minimum essential coverage to full-time employees and their dependents. Large employers that offer this coverage may still be responsible for a penalty if the coverage is unaffordable or does not provide minimum value. Recently the IRS published final regulations on the employer mandate and clarified the definition of hours of service for employers. This clarification will help employers when determining who is a full time employee and should be offered coverage.
The following are definitions of hours of service:
- Each hour for which an employee is paid or entitled to payment while working
- Each hour for which an employee is paid or entitled to payment while on paid time off (vacation, holiday, illness, jury duty, leave of absence)
The final regulations state that all paid leave must be taken into account. It also states that all hours of service worked for all entities should be treated as a single employer. There are different methods of calculating hours worked when dealing with different employee types or categories for example hourly or non-hourly employees. These two are reviewed below but several other employee categories are covered in the healthcare reform bulletin.