Health Care Reform-#1 Stat for Small Businesses

Don’t assume your business is not subject to the Affordable Care Act requirements because you employ less than 50 full-time people.  Part time and seasonal workers are included in the calculation and can have a material impact on the result.

Small business owners must calculate the FTE (Full Time Equivalent) number to determine if they are subject to the Affordable Care Act (ACA) provisions for Large Employers.  An employee is full time if he/she works 30 or more hours per week.  Employees who work less are part time.  For purposes of the ACA, part time employees must be included in the calculation.  Here is the formula:

# of employees who work at least 30 hours/week

PLUS

# of employees who work less than 30 hours/week,  divided by the average number of hours these employees work

An example is:

A company with 35 employees working at least 30 hours per week and 25 employees working 24 hours a week on average

35 +[ 25 x (24/30)] = 55 FTEs for purposes of the ACA.  This company is a Large Employer and must comply with the ACA.

Seasonal workers who work 120 days or more in a calendar year are added to the calculation based on the number of hours per week that they work.

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