Tax & Accounting Blog

The Affordable Care Act: Still a Moving Target

CS Professional Suite Payroll Solutions March 3, 2014

On February 11, the Treasury Department rolled out a new round of changes to the Affordable Care Act (ACA). The changes will affect medium and large employers, as well as some teachers and volunteer workers. Here are the highlights: 

Large employers (100 or more employeesas defined by ACA law)  must now offer health insurance coverage to at least 70 percent of their workers to comply with the employer mandate, down from the original 95 percent. This is only a transitional measure, and the original 95-percent mandate is scheduled to return in 2016. Small Business Association data shows that 113 million people, or 66 percent of all U.S. workers, are employed at businesses with 100 or more workers. 

Medium employers (50-99 employees as defined by ACA law)  have an additional year to provide insurance coverage to employees, as their employer mandate has been delayed until 2016. However, employers who want to take advantage of the delay will need to certify with the federal government that they are not cutting back on positions just to fall below the threshold (additional information on certification is available at the IRS link below). Small Business Administration data shows that approximately 7.8 million people, or 7 percent of all U.S. workers, are employed at businesses with 50-99 workers. 

Volunteers will no longer be counted as full-time employees for ACA purposes. This change mainly affects volunteer firefighters.

Adjunct faculty at colleges and universities  have seen their ACA rules clarified. Each hour of classroom time now counts as 2 hours and 15 minutes of work.  As a result, faculty members who spend at least 15 hours in the classroom each week will be considered full-time.

More Changes in the Works

The House Ways and Means committee has approved legislation that would increase the ACA threshold for a full-time worker to 40 hours per week from the current 30 hours. The change has yet to be passed and signed into law. 

Additional ACA information, including a full text of the latest rules, is available on the IRS website.