As the deadline for implementation of the newest set of rules related to the Affordable Care Act quickly approaches, dealerships are preparing. Kristin Kahle, of Benefit Exchange Alliance, provides eight steps to begin preparing for the upcoming health care reform.
- Determine if you are a large or small employer – In the world of the health care reform, there are 2 buckets of employers: large employers and small employers. A large employer is somebody who employs 50 or more full-time employees. Large employers can also employ 50 or more full-time exemption part-time employees. A small employer is somebody who has fewer than 50 full-time employees.
- Determine if you are going to “Pay or play” – If you are a large employer, decide if you are going to offer benefits or if you are going to pay taxation or a penalty for those benefits.
- Consider the hours your employees work – i.e., are they eligible for benefits? Managing hours worked refers to deciding if your part-time staff will qualify for benefits, meaning do they work over 30 hours a week? Do this by contemplating the following points:
- Look back determination – This determines if you have to offer benefits to a new employee. It is a defined period of not less than 3, but more than 12, consecutive months.
- Initial measurement period – This is a period where you determine whether or not an employee is eligible for benefits. Between 3 to 12 months, the initial measurement period measures the hours of service completed by a new employee during that period of time. This time frame is established by the employer and is three, six, nine, or twelve months.
- Ongoing employee –This is an employee who has been employed by the employer for at least one complete standard measurement period.
- Variable hour employee – This is a new employee with hours that cannot be determined due to not knowing how and when the employee is going to work. You must tell your employee that they are a variable hire upon hiring them. Beginning January 15, 2014, all part-time employees will be classified as variable hour employees.
- Administration period – The administration period follows the initial measurement period and delineates the period of time that you, as an employer, will have to enroll them in benefits. This may last up to 90 days.
- Stability Coverage Period – The period that the employer will be paying for benefits for each employee. The employee cannot contribute more than 9.5% towards benefits. This period must be at least six months in duration, and if you choose a 12-month initial measurement period, then the stability period would be 12 months, so you would measure them for 12 and pay for them for 12.
- Seasonal Employee – Employer’s workforce exceeds 50 full-time employees for 120 days or fewer during the calendar year.
- Coverage Availability – Coverage availability begins the discussion of exchanges. Exchanges are marketplaces depending upon the state that you live in. The exchange again is the place where your low-income workers will go for their tax credit for their subsidy.
Check back next week for the last four steps to begin preparing for the health care reform.
Benefit Exchange Alliance and KPA have joined together to provide complete benefit management consulting and insurance services. For more information please contact kcarlson@kpaonline.com.
