Indiana Business Classification under the ACA

ING_19064_06177With the new laws governing business under the Affordable Care Act, a company must determine how they are viewed under the ACA. There is small group and large group categories. Companies with less than 49 employees are considered small, companies with more than 50 employees are determined large.

To determine which category your company falls into, is not an easy determination. In fact it can be extremely complicated. The complications comes from the part time employees that have a full time equivalent value. The ACA is using a 30 hour work week to define a full time employee. For part time employees, you would add all of the part time hours up and then divide it by 120. 120 hours is the figure that is used for determining your size group.

Here is an easy example: a company with 30 full time employees and then 30 part time employees working an average of 80 hours a month.  30 x 80 = 2,400 hours, this is then divided by 120 hours = 20 full time equivalents. 30 Ft +20 FTE= 50 which leads to the large group classification. Now this employer would have to comply with the employer mandate or pay a penalty. Lucky for this Indiana company, there is a 30 employee deduction before the $2,000 penalty is accessed. This example could make the company decide not to offer group health plans and also avoid any penalties.

The Indiana restaurant and hospitality industry is faced with serious issues under the ACA classification system. It’s better to start addressing this issue on a proactive basis than waiting to be reactive.

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