Obamacare: Next Steps for Retailers

Jan. 1 beginning of several new requirements

Published in CSP Daily News

Obamacare: Next Steps for Retailers

WASHINGTON -- Retailers are gearing up for the next major phase of the Patient Protection and Affordable Health Care Act: counting employee hours. Beginning Jan. 1, 2014, businesses must begin monthly accounting of employee hours to determine their status under the law and whether they will be required to provide health insurance to their full-time workers in 2015.

“The calculation alone has a lot of people paying close attention to this, especially those on the cusp of being considered a large employer,” Michelle Neblett, director of labor and workforce policy for the National Restaurant Association in Washington, D.C., told CSP publication Restaurant Business.

Next year, new requirements will kick in for companies and individuals. Individuals must have some type of health coverage in 2014, whether through an employer or the government, or face a fine. Restaurants and other businesses will begin tallying employee hours monthly. “What you measure in 2014 will determine your status in 2015,” Neblett said.

The law requires large employers--defined as anyone with 50 or more full-time equivalent employees--to provide “minimum essential coverage” to full-time workers, beginning in 2015. An employee’s contribution to that essential coverage must be no more than 9.5% of his or her household income. Large employers who fail to provide coverage will be fined $2,000 per full-time employee.

But determining whether a business is large or small isn’t so much about the number of employees as it is the number of employee hours. Under the law, full time means at least 30 hours a week, or the equivalent of 130 hours a month.

Although employers won’t be required to provide insurance for part-timers, they still must tally their hours. Employers must count up to 120 hours per person every month. They will divide that number by 120 to get a full-time equivalent figure for their part-timers. That figure gets added to the number of full-time employees. This calculation is repeated every month. At the end of the year, employers will tally all of the monthly figures for employee hours and divide them by 12 to obtain the monthly average for full-time equivalent employees. If that average is 50 or above, the employer is subject to the ACA’s rules.

Seattle-based Ivar’s Seafood Restaurants is working with a payroll-systems provider to help its human resources department with determining workers’ hours, said Patrick Yearout, director of training. Ivar’s already is considered a large employer with as many as 1,200 employees. The company owns 24 quick-service and three full-service seafood restaurants and eight hamburger spots. It also does concessions at sports and entertainment arenas. Yearout suggested operators “reach out to anyone who could provide assistance or perspective, including your company’s insurance brokers, ... a local HR group or the company that provides payroll services.”

The NRA’s Neblett said operators should learn as much as they can about the individual mandate so they can give employees accurate information. The U.S. Labor Department and the NRA have information on their websites that employers can download to give to workers. State associations and labor departments also can provide details on the law.


Obamacare Watch - Jan. 1, 2014

  • Employers unsure of their status as an “applicable large employer” will measure employee hours Jan. 1–Dec. 31, 2014, to determine their status for calendar year 2015.
  • Some large employers will begin offering coverage that voluntarily complies with the employer mandate requirements to use 2014 as a test year.
  • Individual mandate begins. Employees will continue to shop for coverage; exchange open enrollment ends March 31, 2014.