Under the Affordable Care Act (i.e. ObamaCare) penalties are imposed on “large employers” (i.e. those with 50 or more full time employees) if any “full time” employee receives a tax subsidy to assist in buying health insurance. For employers in the staffing industry, who bring on w-2 employees to staff client projects, determining what constitutes “full time” employment under ObamaCare could be a complicated task.
As part of the ObamaCare implementation process, the Department of Labor recently released “frequently asked questions” which, in part, touch upon the “full time” employment question. (see http://www.dol.gov/ebsa/pdf/tr12-01.pdf) According to the DOL, “full time” employees are those who are employed at least 30 hours per week. In making such determination, for employees who are not “newly hired” employers can “look back” for up to 12 months to determine who is full time. For “newly hired” employees, an employer will be given six months to determine whether it “reasonably expects the employee to work full-time on an annual basis.” The FAQs further provide that if “a newly-hired employee is reasonably expected to work full-time on an annual basis and does work full-time during the first three months of employment, the employee must be offered coverage under the employer’s group health plan as of the end of that period.”
The “reasonable expectation” standard established by the DOL may prove difficult for staffing companies to utilize due to the fact that employment terms are based on client needs, which often are unknown and change day by day. As the Obama regime moves to implement ObamaCare, more definitive guidance will be issued by the IRS and Treasury Department that may further clarify the “full time” definition. Hopefully such guidance will address other issues such as seasonal, temporary and flex schedule employees.
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