Cover Story: Obamacare: This Might Hurt a Little
An examination of what the Affordable Care Act means to your business
That delineation may sound straightforward, but of course, details of the law are never simple. The complexity shows up in two areas: the definition of a full-time employee and the concept of full-time “equivalent.” So far, full time has meant any employee working more than 30 hours a week. However, at press time, the House Ways and Means Committee approved a bill to define full-time employees as working an average of 40 hours a week. How far the measure will go to affect the law is unclear.
In the meantime, being clear about the 30-hour requirement is an important detail, because there are gray areas. In some cases, an employee’s hours can fluctuate week by week. In that instance, an average over 12 months is a good measure, says one health-care consultant. If over the year the employee works more than 30 hours on average, then he or she is full time.
The real concept to grasp is that of a full-time “equivalent,” says Jeff Kirke, vice president of Holmes Murphy and Associates, a health-care broker based in Des Moines, Iowa. An employer may have less than 50 full-time workers and several part-timers. But two employees working 15 hours can add up to a single full-time person, thus triggering the fulltime “equivalent” scenario and bumping the employer into the next bracket.
Whatever the case, “employers will have to make a decision,” Kirke says. “But it’s a core-beliefs discussion. You don’t have to offer benefits today, but a lot are because they want to be an employer of choice.”
Indeed, for many businesses, the new law merely laps up against formidable packages they’ve already implemented. In Honolulu, for instance, employer mandates have been in place for years, so Aloha Petroleum officials say they already provide coverage to all full-time employees. “This does raise our costs,” says Richard Parry, president and CEO of Honolulu-based Aloha. “But it provides a valuable benefit to our employees.”
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