The Affordable Care Act (ACA) became a law on March 23, 2010. Now, four years later, because of delays in the implementation, most employers have waited to take the steps necessary to comply with the law. This should be of particular concern to businesses who haven’t yet started tracking employee hours on a weekly and monthly basis.
In order to avoid potential tax penalties for large employers, or to qualify for upcoming tax credits for small employers, businesses will be required to validate full time and Full Time Equivalent (FTE) employee counts by submitting worksheets with employee hours worked by week and/or month to the IRS.
The simplest solution is to implement electronic timekeeping!
Even if you have the information on timecards, it will still be a time consuming task to break it all down and transfer to the worksheet. And oh, by the way, your payroll company probably doesn’t have the information either because you don’t report it to them. You only report totals for the pay period, not by week and by month. So basically you have two options: Transfer all your time cards to a worksheet by hand; or use a time clock.
To assist employers with ACA management and determining potential exposure, Payroll Masters recommends using our fully integrated electronic timekeeping system TODD. With TODD you get many features to help with ACA compliance including a Work Week Report and Hours Alerts.
We invite you to contact Payroll Masters to learn more about our electronic time keeping system TODD, or the ACA and these new features at 707-226-1428 or 800-963-1428.
“Work Week Report” – TODD’s ACA compliant “Work Week Report” enables employers to quickly calculate their count of full time employees, Full Time Equivalents (FTE’s), and non-full-time employees. Employers can view how each employee contributes to the FTE count.
“Hours Alert” – TODD’s “Hours Alert” feature alerts employers precisely when part-time employees will cross over a defined period of hours for the week, such as 28 or 30 hours.
Benefits of these new features:
- Quickly determine your current and ongoing “large employer” classification status. Are you over or under the threshold of 50 full time and “Full Time Equivalent” employees? This will determine your IRS and ACA “Shared Responsibility” exposure.*
- Manage employee hours in advance to avoid exposure. Get alerts to determine when part-time employees will cross over 28 hours, 30 hours, or another defined count of hours per week.
- “Pay”, “Play”, or qualify for incentives. Avoid “Shared Responsibility” tax penalties, recognize your large employer status, or perhaps even qualify for tax incentives as a small employer by effectively validating your “Full Time Equivalent” counts.*
- Validate your status as a small employer. Employers must have 25 FTE’s or less to qualify for health insurance tax credits (up to 50% in 2014). Also, employers generally under 100 FTE’s will be eligible to shop for better group insurance benefits through public health exchanges.*
Employer note: Employees over 30-hours per week or 130-hours per month will qualify for employer-sponsored “affordable” health care.*
Perhaps more than anything else, regardless of your company’s size, electronic timekeeping can help you get prepared for ACA reporting in 2015! Contact Payroll Masters today for more information about our electronic timekeeping service, 707-226-1428.
*Note: Other eligibility requirements apply. Check www.irs.gov for more information.
By David Wildhagen, President of Payroll Masters (with exerts and images from the TickTalkBlog)
2014 © Copyright Payroll Masters
This document has been provided for informational purposes only and is not intended and should not be construed to constitute legal advice. Please contact your employment attorney in connection with any fact-specific situation in which you intend to take significant employment action. Readers agree that they will not hold Payroll Masters in indemnity and Payroll Masters assumes no liability. Payroll Masters is not engaged in rendering legal or accounting services. Therefore, Payroll Masters assumes no responsibility for claims arising from the use or implementation of the above information.