Why Size Matters for ACA Compliance

If you’re unclear about the deadline for achieving compliance with the ACA (Obamacare) mandate to provide coverage for your employees, you’re not alone. There is significant uncertainty about the sprawling piece of legislation.  If you’re a user of contract labor as part of a broad workforce management program, the task of making this determination is even more complex. What follows are some guidelines to help you understand how and when your organization must be fully compliant along with a key piece of critical information many may not have considered. 

As we know, the original roll out date was postponed and the Federal government gave businesses a bit more time to become compliant.  The shifting dates have been cause for a bit of additional confusion. Here’s what we know courtesy of a fantastic, exhaustive piece from insurer, Aflac:

“Beginning Oct. 1, 2013, employers with 50 or fewer FTEs became eligible to purchase health insurance for employees through the government marketplace, the Small Business Health Options Program (SHOP).

On Feb. 10, 2014, the federal government announced a delay to the employer shared-responsibility penalty, giving employers time to transition into the new rules. Given this delay, starting in 2015 businesses with 100 or more full-time equivalent employees need to provide affordable, minimum value health care coverage to 70 percent of all full-time employees and their dependents, unless the employer qualifies for 2015 dependent coverage transition relief, or face a penalty.

In 2016, the 70 percent threshold is increased to 95 percent, and the shared responsibility penalties will also apply to employers with 50 or more full-time equivalent employees.”

The size of each organization determines how much leeway they’re given with respect to compliance dates. For those using contract labor, there are specific calculations – some dictated by the ACA and others by the IRS – used to determine if a worker is considered part time or full time equivalent (FTE).  The Aflac piece also provides great insight on how to calculate whether a resource should be considered a FTE or not.  Get a handle on the numbers of full time and FTE workers within your organization and make sure that you’re compliant according to schedule.

Now for that piece of critical information you may not have considered.  If you’re using any of the larger staffing suppliers to source talent, it is entirely possible that they qualify for deferral until the 2016 deadline. Subsequently, should the large supplier not be compliant yet, they may be within the law (for now). However as a smaller, compliant organization, you need to be aware of contractors on your premises who are non-compliant as this could be a liability for your organization. Take the extra steps to poll your suppliers on their current status with respect to ACA compliance so you don’t run afoul of the law.  For more information on the ACA, download our recent e-book on the topic.