Safe harbor protects employers from free-rider penalties

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in Office Management,Payroll Management

Under the Affordable Care Act (ACA) health care reform law, employers of 50 or more full-time em­ployees during the preceding year will pay free-rider penalties if they don’t offer full-time em­­ployees (i.e., those who work at least 30 hours a week) affordable health benefits.

How you determine full-time status is the subject of new IRS guidance. Key: Under an optional safe harbor, Payroll must set up tracking periods, called look-back periods, for employees who work variable hours. Heads up: For decisions regarding benefit eligibility in 2014, you’ll need to start these tracking periods soon. (Notice 2012-58, Notice 2012-59, IRB 2012-41)

Current employees

To determine whether ­current employees work full time or part time, you may use the new look-back/stability safe harbor.

There are three components to the safe harbor:

• A look-back period, also called a standard measurement period, during which employees’ hours are trac...(register to read more)

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