What Is a Part-Time Equivalent?

What is a part-time equivalent as it pertains to the ACA?  The IRS has ruled that the formula to find out what your part-time equivalents will be is as follows;  You take the total number of part time employees  and multiply it by the total up the hours for the month they all worked and divide by 120.   So to give a real example, if a company has 8 part-time employees and the total of their hours worked per month is 85 hours you would multiply 8 times 85 which equals 680 hours.  Then you divide the 680 hours by 120 and you get 5.66 employee equivalents.  You would then add that to you total of full-time employees (those working 30 hours a week or more) and you would have the total number of employees in that company.

This will need to be done on a regular basis if you are concerned about the size of your company moving over the 50 employee mark.  If you are over 50 employees or you offer every employee affordable health coverage if they work 30 hours or more a week, then you will not need to calculate part-time equivalents.

If you have any questions on the this or anything else that has to do with health insurance or life insurance please feel free to call us at 714-680-5900 or email us at info@ansainsuranceservices.com .
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Covered California Update

California has received another Federal Grant for $674 million bringing the total received from the Federal Government to $1 Billion since the PPACA was passed back in 2010.  According to the Sacramento Bee (1/18/2013 Cynthia Craft) these funds are being used to set up the California Health Exchange, known as Covered California.  The exchange has been working with the health insurance carriers to set up four tiers of coverage that will be known as metallic plans.  In a nut shell, the four tiers will be called platinum, gold, silver and bronze.  Platinum coverage means that the insured can expect to pay 10% of their expenses and the insurance plan will cover the other 90%.  Gold plans will cover 80% of the expenses and the insured will pay the other 20%.  Silver will be a 30% - 70% split and bronze will be a  40% -60% split.  Platinum plans will have the highest premiums and bronze will be the least expensive to purchase.

California is still on track to have their exchange up and running on January 1, 2014.  We will keep you updated on the progress as we approach the sign up period which will be starting in October 2013.  If you have any questions regarding the exchange or your current insurance plans, you may call us at 714-680-5900 or email us at info@ansainsuranceservices.com .

Safe Harbor Ruling from IRS

Among the many clarifications that have come out for businesses from the IRS on the Affordable Care Act has been the safe harbour ruling for employers dealing with providing affordable coverage to their employees.  In the latest ruling on what "affordable" is for an employee, the group may take the lowest paid employee's hourly wage and multiply it by 130 hours of work.  Take that number and multiply it by 9.5%.  If the employee pays more than that per month for their health insurance, then the coverage is not affordable and the employer can be fined if the employee gets a subsidy from the health exchange. 

So here is an example of that rule.  If an employee makes $10.00 an hour and you multiply that wage by 130 hours you get 1,300.  Take 1,300 and multiply it by 9.5%.  The monthly contribution can not be more than $123.50 a month.  If the employee pays more than that a month for their health insurance then the employer would be subject to fines. 

The IRS is taking public comment on the new rules until March 18th.  After that there will be public hearings on April 23rd.  It will be after those hearings that we will know which of the rules will stay and which will be adjusted.  Stay Tuned!

Remember - Starting 2014 full time (for health insurance) means 30 hours of work a week not 40 hours.

Young Adults to Pay up to 42% More

In a reveling article in the St. Paul Business Journal Kent Hoover spells out the practical side of the Affordable Care Act.  In a nut shell he explains why young adults between 21 and 29 years of age will be paying up to 42% more for their health benefits starting in 2014.  Currently most states mandate that there are 5 age bracket from 21 to 64, thus keeping premium costs low for the young and quite expensive for the 60+ age group.  Starting in 2014 there will be a 3 age band imposed on plans.  Meaning the young will pay much more in premiums and the older will pay much less for their health care premiums.  To read the full article click on the link  http://www.bizjournals.com/bizjournals/washingtonbureau/2013/01/07/young-adults-to-pay-more-for-health.html . 

It may be necessary to band the ages this way, but with young people already taking the brunt of the bad economy, does this make sense?  I can tell you from personal experience, that we write young people up on individual policies that at are paid for by their parents every month.  These parents are not in the 60's yet so they are not receiving the benefit of lower premium rates for themselves and yet they are now footing the bill for their adult children that simply can not afford their health insurance.  How will they afford a 42% rate increase next year?  We will see what happens. 

IRS Ruling on Determining Group Size

On Friday December 28, 2012 the IRS issued rules for determining group size for ACA compliance. The proposed regulations provide a comprehensive structure of rules that employers will need to follow to comply with the law

The rules will not go into effect until January 1, 2014. The entire 144 page text of the regulations may be viewed at www.irs.gov/pub/newsroom/reg-138006-12.pdf (Cut and paste into your browser if link is not active).  Please be aware though that calculating the group size will be based on 2013 employees, not 2014. 

In short what this means to you is that for the most if you have under 50 full-time equivalent employees working for you, you wont be subject to many of the penalties.  The big question is "what are 50 full time equivalent employees"?  For the purpose of insurance full time pertains to anyone working 30 or more hours per week. NOT 40 hours - 30 hours.  If you have seasonal or part-time workers than you need to be cautious and read the IRS regulations for the formulas.  Your insurance broker should be able to help you figure out how to calculate the part-time and seasonal employees.  But be aware that the burden falls on the employer. 

If you would like to get more information on this topic, please call us at (714)680-5900 or you can email us at angela@ansainsuranceservices.com .  As always, you can find us on the web at www.ansainsuranceservices.com .

Aetna News

Aetna announced that they have worked with the California Department of Insurance and agreed on a rate reductions for small groups with renewals for January through March 2013.  The reduction affects the Managed Choice plans and the Open Choice PPO plans.  If you would like more information on the rate reduction and to see if it will affect you, please call us at 714-680-5900.  You can also email us at lisa@ansainsuranceservices.com or info@ansainsuranceservices.com .

Anthem Rate Lock

Anthem Blue Cross has announced that any individual and family plan applications approved prior to January 16, 2013 will have the January premium rate (February 1st their rates are set to increase).  In addition to that they will guarantee rates for six months on new members.  If you have been putting off getting health insurance, now is as great time lock into those rates. 

If you have not been receiving a newsletter from us and you would like to be added to our mailing list, please send your information to info@ansainsuranceservices.com and we will get you added.  Be on the lookout for opportunities to see us speak on health reform and how it will affect you.  You can always find out more about us at www.ansainsuranceservices.com .