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.
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