HROT January/February 2014 - 46

The Benefits Package
Getting It Right
Prepare for the complex layers the ACA will add to your payroll.
By Howard Tarnoff
The Affordable Care Act's employer mandate, as known
as play or pay, redefines full-time employment for hourly
workers. A key component of the ACA, the employer
mandate's effective date was postponed last summer for
one year until January 2015. The delay was a welcome
reprieve. Organizations that do not offer employersponsored
health insurance to employees fitting this new
definition will be subject to hefty penalties-thousands of
dollars per employee. And many payroll systems aren't up to
the task of conducting the complex, real-time calculations
required to comply.
Let's start with all the new definitions. For the purposes
of healthcare coverage, the ACA redefines full-time versus
part-time employees, and large versus small employers,
among others. These new definitions and their related rules
pertaining to the employer mandate are complicated.
Here is a rundown:
Full-time variable-hour employees. In redefining full-time
for purposes of the employer play or pay mandate, the
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HRO TODAY MAGAZINE
| JANUARY/FEBRUARY 2014
ACA identifies a new category of employees: variable-hour
employees. Going forward, the ACA requires employers to
calculate hours worked over a specific period to determine
employment status. At large employers, variable-hour
employees fitting the ACA's definition of full-time are
any who average 30 or more hours of service per week or
130 hours of service per month. Under the ACA, full-time
variable-hour employees of large organizations are eligible
to receive employer-sponsored healthcare benefits or
minimal essential coverage (MEC).
Large versus small employers. Large employers are those
employing at least 50 full-time and full-time equivalent (FTE)
employees during the preceding calendar year. According
to different calculations, full-time or full-time equivalent
employees' hours both count toward the total workforce
that determines whether an organization is large or small as
defined by the ACA.
Hours of service. Under ACA, hours of service factors into
calculations related to these other definitions. For instance,

HROT January/February 2014

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