Pub. 1 2013 Issue 4

For purposes of the payment, only full-time employees (not full-time equivalents) are counted. The $2,000 penalty is an annual penalty, imposed monthly, so if you play for some months, you will only pay 1/12 of the $2,000 for those months in which you do not play. If an employer offers coverage to at least 95% of full-time employees, but that coverage does not provide minimum value or it is not offered at an affordable price, and at least one full-time employee qualifies for federal premium assistance for his or her coverage under the Exchange, or if the employer does offer coverage to 95% of full-time employees but one of the 5% of the uncovered full-time employees qualifies for federal premium assistance for coverage under an Exchange, it will owe the IRS a non-deductible annual payment equal to $3,000 per employee receiving federal premium assistance, up to a maximum of $2,000 times the number of its full-time employees minus 30. An individual or family will qualify for federal premium assistance if their household income is less than 400% of the federal poverty level. Exchanges, which were mandated under ACA, will exist in every state as of January 1, 2014. Some will be administered by the state itself (usually via contracts with existing insurance companies), some will be administered by the state and federal governments and some will be administered by the federal government on behalf of the state. The Exchange is a new way for anyone to gain medical insurance coverage. In essence, the state becomes the insurance company: individuals pay premiums to the Exchange for their desired level of coverage and the state guarantees the payment of covered claims. For some, it is the only access to medical coverage they have. For full-time employees, it is most likely one of the available options for medical coverage. Offering Coverage To Full-Time Employees To play, the employer must offer qualified coverage to full-time employees. The determination of who is a full-time employee can be rather convoluted and depends on whether the employee is an ongo- ing or new employee. The IRS’ January 2013 proposed regulations set forth the required recordkeeping and administrative requirements for determining full-time status. For ongoing employees, you must use a standard lookback measure- ment period of from three to 12 months to determine whether each employee worked, on average, 30 or more hours per week. At the end of eachmeasurement period, the employer determines if each employee will be classified as full-time or part-time for the following stability period, which must be from six to 12 months in length. But the stability period for full-time employees cannot be shorter than the standard look-back measurement period and the stability period for non-full-time employees cannot be longer than the standard look-back measurement period. You may use an optional administrative period of up to 90 days to make the classification calculations and complete open enrollment for the stability period associatedwith each standard look-back measurement period, but any administrative period must overlap with the prior stability period to prevent a gap in coverage. Employees who are determined to be“full-time”at the end of a standard measurement period keep such classification during the associated stability period so long as they remain employed, regardless of the hours worked during the stability period. If a new employee is expected to work 30+ hours per week, he or she is classified as “full-time” from their start date and must be offered If you have employees, you have a reason to call us. 4747 Executive Drive • Suite 1000 • San Diego, CA 92121 • 858.597.9600 www.laborlawyers.com SOLUTIONS AT WORK ® ATLANTA BOSTON CHARLOTTE CHICAGO CLEVELAND ORLANDO PHILADELPHIA PHOENIX PORTLAND SAN ANTONIO LOUISVILLE MEMPHIS NEW ENGLAND NEW JERSEY NEW ORLEANS HOUSTON IRVINE KANSAS CITY LAS VEGAS LOS ANGELES COLUMBIA COLUMBUS DALLAS DENVER FORT LAUDERDALE SAN DIEGO SAN FRANCISCO TAMPA WASHINGTON,D.C. Continued on page 31