January, 2016 has created a ripple of different questions and opinions on the future of health care. With the implementation of The Affordable Care act, policies are in full effect! One of the biggest questions that we get asked are about the minimum amount of hours employees have to work in order to he eligible for health benefits. There is some uncertainty on this topic, but going over the basics will give you a better overall picture for you as an employee and as an employer.
As per the guidelines of the Affordable Care Act (ACA), the benefits are required to be offered to any Full Time Equivalent employees (FTE) only, when the business employs more than 50 people as full time employee. ACA defines an FTE as any employee who works for at least 30 hours or more for the business in a week OR a minimum of 130 hours in a month. Also, at the same time, they will have to work for more than 120 days in a year for the same employer to be eligible for this benefit.
Any part time workers, who put in less than the above hours in a week or month or work for less than 120 days of a year for the employer, may not be eligible for the mandatory health care benefits from their employers.
As per the mandate, every full-time employee should count as 1 full-time employee and each 30 hours worked by any non-full-time workers are to be considered as equal to 1 full-time equivalent employee. The employer must add both these full-time and full-time equivalent workers to find out the exact number of employees to be considered effective under the mandate.
But, the calculation of total hours worked by an FTE can be handled in different ways, resulting in different outputs finally. These methods are as below:
Thus, the total number of hours an employee worked will change in each of the 3 methods described above.
There are a few exception pointers to note in this whole scenario, and they are listed as below:
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