Are You Ready for the Affordable Care Act?

If you’re an employer with 50 or more full-time equivalent employees (FTEs), it’s time to prepare for the Affordable Care Act (ACA). Employers with 50-99 employees have a bit of a grace period from the employer mandate for 2015, but still need to comply with other aspects of the Act. Ignoring your requirements can be expensive, with penalties of $2,000 for each full-time employee; or even $3,000 for each full-time employee whose coverage wasn’t affordable or didn’t meet the minimum value requirements.

If you’re subject to the Act, here’s what you should be doing now and preparing to do before the end of 2014:

  1.  Determine your standard measurement, administrative, and stability periods.
  2. Determine which of your employees need to be offered coverage for 2015. This includes all employees with the category of “full time”, as well as those variable-hour employees who averaged 30 hours or more per week during your standard measurement period. Don’t forget to keep track of unpaid leave such as FMLA, military leave and jury duty as you calculate hours.
  3. Find a health insurance plan that is right for your organization.
  4. Offer health insurance coverage to the employees identified in step #2 as well as their dependents (not including their spouse, stepchildren or foster children).
  5. Distribute the Summary of Benefits and Coverage (SBC) provided by your health insurance carrier, along with enrollment materials, during your enrollment period.
  6. Be sure to keep records of employee insurance coverage elections, including those employees who decline the offer of coverage.

As you hire new employees, determine whether they are full-time (reasonably expected to work 30 or more hours per week) or variable-hour employees, and proceed accordingly. Known full-time employees should be offered health insurance before the first day of the month following three full months of employment. Variable-hour employees who average at least 30 hours per week during the initial measurement period (the 3-12 month period where you can “look back” to determine average hours per week) need to be offered coverage at the end of that initial measurement period. Please note – employers have 13 months plus a fraction of a month to offer an employee health insurance coverage, depending on the employee’s date of hire, so monitor hours throughout the measurement period to be aware of employees whose average hours approach the 30-hour threshold.

This is just a brief overview of the complexities of the Affordable Care Act. If you’d like a copy of our 25-page ACA Guide, email us at and we’ll be happy to send it to you!