THE PLAY OR PAY PENALTY
AND COUNTING EMPLOYEES UNDER PPACA
Determining how many employees you have is important for several purposes under the Patient
Protection and Affordable Care Act (PPACA). So far, no final rules have been issued, but on Aug. 31,
2012, the regulatory agencies issued safe harbors for 2014 on several key issues. The agencies have
also provided some indications of what they are considering on other issues relating to the employee
identification issues.
The notices (IRS Notices 2012-58 and 2012-59) follow prior thinking on how new and existing (“ongoing”)
employees who have a stable work schedule will be handled. Significant additional flexibility has been
provided to those employers with seasonal and variable hours employees, but with the flexibility has
come a great deal of complexity. Many employers will not need to explore all of the available options;
therefore, this piece deals with the more straightforward situations first.
Details are still needed on several other factors that impact whether an employee will need to be counted.
Section 1 - The Basics
PPACA provides that an employer that has 50 or more full-time employees or full-time employee
equivalents (a “large employer”) must provide health coverage, or pay one of two penalties. (See Section
8 for details on the penalties.) PPACA also says that:
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An employer is a “large employer” for a calendar year if it employed an average of at least 50 fulltime or full-time equivalent employees during the prior calendar year
An employee is considered full-time for a particular month if he works an average of at least 30
hours per week during that month
Part-time employees count on a pro-rata basis as “full-time equivalent” employees. The method
of counting these employees is to divide the total hours of service of all employees who are not
full-time for the month by 120
All members of a controlled group or an affiliated service group count when deciding if the
employer has 50-plus full-time employees or equivalents
Seasonal employees are counted toward the 50 employee threshold unless:
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the employer crossed the 50 employee threshold for 120 or fewer days during the
calendar year, and
employment of seasonal employees is why the employer exceeded the 50 employee
threshold
To implement this requirement, the agencies have said that they expect to issue regulations that will
address a number of practical questions. Note that this requirement applies to all types of employers:
private businesses, governments (including schools) and not-for-profits.
Section 2 - Who is considered an “employee”?
The agencies have stated that they will likely define an employee as a “common-law employee.” This
means, for example, that independent contractors, directors and partners likely will not count.
Unfortunately, there is not a black and white definition of who is a “common-law” employee. Typically, the
more control the hirer has over how an individual performs a task, the likelier it is that the person is a
common-law employee. See Attachment A for additional information on how to decide if a person is a
common-law employee.
Note: the government has been cracking down on entities that misclassify employees as independent
contractors. This definition will provide another area of potential dispute. Employers who choose to
consider individuals in unclear situations as non-employees should take care to document their
reasoning and should consult with legal counsel.
It is unclear how leased employees will be handled; the agencies have said they will address this later.
There are no special provisions for employers with unions, so employees covered by a collective
bargaining agreement are treated the same as any other employee.
To date there are no rules that address how the employer mandate applies to U.S. citizens working
overseas or to non-citizens working in the U.S. Since employees working overseas are specifically
exempted from the individual mandate and would not be purchasing coverage from an exchange, it
seems reasonable to assume the play or pay penalty will not apply to these individuals. Conversely,
foreign workers likely are subject to the individual mandate and could be exchange-eligible, so it is quite
possible that they will be considered “employees” for purposes of the employer penalties. Until
regulations are issued, however, there will not be a clear answer on this issue.
Section 3 - How will an employer count hours?
It is expected that current DOL rules for counting hours for pension plan purposes will be used to count
an employee’s hours of service as a full-time employee or full-time employee equivalent. Under these
rules, a person is considered to have completed an “hour of service” with each hour for which he is paid
for work, vacation, holiday, sick time, layoff, jury duty, military duty, etc.
When converting time to a monthly basis, 30 hours per week would mean 130 hours per calendar month.
The agencies are considering several possible methods of counting hours and have said that they expect
that employers will be able to use different counting methods for different classes of employees. The
proposed methods include:
 For employees who are paid hourly, actual hours worked or paid would need to be used
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For employees who are not paid hourly, alternatives would include:
o Counting actual hours worked or for which vacation, holiday, etc. are paid
o Crediting an employee with eight hours’ work for each day for which the person was paid for
at least one hour of work, vacation, holiday, etc.
o Crediting an employee with 40 hours’ work for each week for which the person was paid for
at least one hour of work, vacation, holiday, etc.
Section 4 - How will part-time employees be counted?
Employees who work less than full-time (30 hours per week) count towards “full-time equivalent
employees” when deciding if the employer has 50 employees. Full-time equivalent employee numbers
would be determined by:
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Using the hours of service each month for each person who worked an average of less than 30
hours per week during the month
o This includes the hours of seasonal employees who averaged less than 30 hours for that
month
o A maximum of 120 hours of service should be considered for any employee who is not
full-time for a month
Counting fractions for each monthly total, but rounding the total annual number down.
“Seasonal employees” would mean retail employees who work only during holiday seasons and
others who perform work that by its nature is only performed at certain times of the year (such as
harvesting or tax season).
Section 5 - How is the employee count to determine “large employer” status for play or pay
penalties performed?
It is expected that large employer status would be determined by calculating the number of full-time and
full-time equivalent employees for each month, totaling the monthly numbers and dividing by 12. The
proposed process would be:
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Calculate the number of full-time employees for each month of the prior calendar year
Calculate the number of FTEs for each month of the prior calendar year (if you get a
fraction, keep the fraction)
 Add the number of FT and FTEs for each month
 Add the 12 monthly totals together
 Divide by 12
If the final result is a fraction, the employer would round down to the nearest whole employee.
If the result is 50 or more, the employer is a “large employer” and subject to the penalty, except
that if the employer only exceeds the 50 FT/FTE threshold for fewer than 120 days (4 months) of
the year and seasonal employees caused it to exceed to 50 threshold, the seasonal employees
can be disregarded when deciding if the employer is large.
See Attachment B for an example.
The normal controlled group rules will apply. Basically, if an employer is part of a family of companies, all
of the companies may need to be added together to see if the employer is a large employer. So if Ann
owns the Clean Car Wash, which has 22 employees and Diaper Day Care, which has 30 employees,
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both Clean Car Wash and Diaper Day Care are considered large, because 22 + 30 = 52. The employer’s
tax person should know if the employer is part of a controlled group.
Section 6 – How does an employer determine average hours worked?
An employer may simply look at its population on a current, month by month basis if it wishes to.
However, to avoid the complications that may arise if an employee alternates between working more and
less than 30 hours, or to simply reduce calculation frequency, IRS Notice 2012-58 gives an employer the
option of using longer calculation periods to get a smoother, more predictable result if it prefers to do that.
If the employer wants to use a smoothing technique, different processes apply to existing and new
employees.
A. The calculation option for existing (“ongoing”) employees
Instead of tracking time currently, an employer may look at how many hours the employee averaged
during a lookback period called a “standard measurement period.” Once the determination is made
whether the employee worked full-time during the standard measurement period that determination will
apply throughout the related stability period regardless how many hours the employee actually works.
(Note that the employer will still have to track the employee’s hours during the stability period, as that
information will be needed to make the determination for the next standard measurement period.) To use
this option:
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The employer must choose a “standard measurement period” of three to 12 months. The
standard measurement period is the “lookback” period that is used to track the employee’s hours
and determine how many hours he worked, on average, during the standard measurement period
 The employer must choose a start date for the standard measurement period. It can be Jan. 1,
the first day of the benefit period, a date near the start of open enrollment, or any other date the
employer chooses
 The employer must choose a stability period. The stability period is the period for which the
employee is considered “full-time” or not full-time, based on the average hours worked during the
standard measurement period. The stability period must be:
o At least as long as the standard measurement period
o Not more than 12 months
o No longer than the standard measurement period if the employee is determined to not be
full-time
o At least six months if the employee is determined to be full-time
 Employers may use different standard measurement and stability periods and period start dates
for these classes of employees:
o Collectively bargained and non-collectively bargained
o Hourly and salaried
o Employees of different entities
o Employees located in different states
Example: ABC Corp. chooses to use a 6 month standard measurement period and a 6 month
stability period. ABC’s first standard measurement period will begin on July 1, 2013 and end on Dec. 31,
2013 and its first stability period will run from Jan. 1, 2014 through June 30, 2014.
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Bill works:
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29 hours per week in July 2013
30 hours per week in Aug. 2013
28 hours per week in Sept. 2013
28 hours per week in Oct. 2013
26 hours per week in Nov. 2013
33 hours per week in Dec. 2013
35 hours per week in Jan. 2014
32 hours per week in Feb. 2014
30 hours per week in March 2014
33 hours per week in April 2014
31 hours per week in May 2014
28 hours per week in June 2014
Bill’s average is 29 hours per week during the July – Dec. 2013 standard measurement period.
He will not be considered a full-time employee for purposes of the play or pay penalties during the
stability period (Jan. – June 2014) even though he is regularly working more than 30 hours per
week during that time.
When Jan. – June 2014 becomes the measurement period, the 35 + 32 + 30 + 33 + 31 + 28
hours worked will be averaged, and because Bill is full-time (31.5 hours per week) during that
measurement period, he will be considered full-time for play or pay purposes from July – Dec.
2014 even if his hours drop below 30/week during that period, as long as he remains employed
by ABC.
An employee is considered “ongoing” once he has completed a full standard measurement period.
Note: Employers will want to weigh the administrative burden of using this method with the potential to
exclude certain employees for purposes of the penalty. Employers who have employees work fewer
hours during certain times of the year, such as schools, may find that using a 12-month standard
measurement period will be advantageous.
B. Option to add an “administrative period” for ongoing employees
Because employers may need time to determine whether an employee is “full-time” during a standard
measurement period and to provide time to enroll the employee if he is eligible, employers may elect to
use an administrative period. However, the administrative period may not be used to extend either the
standard measurement period or the stability period, which adds some complexity to the permitted
calculation periods.
When using an administrative period, these are the rules that must be followed:
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The administrative period cannot be more than 90 days
The administrative period cannot reduce or lengthen the standard measurement period or stability
period
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The administrative period must overlap the prior standard measurement period
o This means that employees who are full-time based on the prior standard measurement
period must remain eligible through the end of the current stability period
Example: XYZ Co. has a calendar year plan and open enrollment is from Nov. 1 – Nov. 30. XYZ
chooses a 12 month stability period that begins each Jan. 1 (to coincide with the plan year), a 12 month
standard measurement period that begins each Oct. 1 (to maximize the standard measurement period,
but allow for the administrative period) and a 3 month administrative period that begins each Oct. 1
(giving XYZ the month of October to determine who is eligible for open enrollment, November to conduct
open enrollment and December to complete enrollment processing).
Jane averaged 32 hours per week during 2013 (the standard measurement period) and was provided
minimum value, affordable coverage under XYZ’s plan during 2014 (the stability period). XYZ determines
that Jane averaged 28 hours per month from Oct. 1, 2013 – Sept. 30, 2014. This means that (1) XYZ
does not have to offer coverage to Jane during the Nov. 2014 open enrollment period to avoid penalties
in 2015 and (2) XYZ must continue to offer Jane coverage through Dec. 31, 2014 (the full 2014 stability
period).
C. Handling new employees who are expected to work full-time
To avoid penalties, a new employee who is reasonably expected to work 30 or more hours per week must
be offered coverage following satisfaction of the eligibility waiting period. Under PPACA, the waiting
period generally cannot be more than 90 days. No play or pay penalty will be owed during the waiting
period if the employee is offered coverage that would be effective on or before the end of the permissible
waiting period.
D. Handling new employees who work variable hours or seasonally
At least for 2014, employers who hire seasonal or variable hours employees have significant flexibility in
determining whether the new employee is full-time. Employers in this situation may elect to use an “initial
measurement period” to determine whether the employee is full-time during a subsequent stability period.
Additionally, no penalty is due during this initial measurement period, even if it is ultimately determined
the employee averaged 30+ hours and was therefore a full-time employee during this time. Note that
this method may only be used when the employer truly expects the employee’s hours to fluctuate
or the employee is a seasonal employee.
“Seasonal employee” is not defined in the new notice and at least for 2014, an employer’s good faith
determination that an employee is seasonal will be honored. Usually, seasonal employment means
employment for a limited period to perform a specific function, such as retail during holiday seasons, tax
preparation during tax season, or agriculture during harvesting season.
“Variable hours employees” are those whose hours are variable or are otherwise uncertain and who are
not reasonably expected to average 30 or more hours per week over the measurement period. This
would include both those expected to work full-time when initially hired but who are expected to have their
hours reduced at some point (such as retail workers hired in November) and those whose hours vary from
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week to week, such as on-call employees.
To use the seasonal/variable hours option:
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An “initial measurement period” of three to 12 months must be chosen
The stability period:
o must be the same length as the stability period for ongoing employees
o for new employees determined to be full-time:
 it must be at least as long as the initial measurement period
 it must be at least six months long
o for new employees determined not to be full-time:
 it must not be more than one month longer than the initial measurement period
 it must not exceed the remainder of the standard measurement period, plus any
associated administrative period, in which the initial measurement period ends
Employers may use different initial measurement and stability periods and period start dates for
these classes of employees:
o Collectively bargained and non-collectively bargained
o Hourly and salaried
o Employees of different entities
o Employees located in different states
Example: Because XYZ uses a 12-month stability period for ongoing employees, it must use a
12-month stability period for new hires. XYZ chooses an initial measurement period of 12 months for
new variable hours and seasonal employees. Sally is hired May 10, 2014. Sally is a lifeguard who
will work school vacations and XYZ considers her a seasonal employee. XYZ tracks Sally’s hours
from May 10, 2014 – May 9, 2015, and determines she averaged 32 hours per week during that time.
Sally must be offered coverage as of June 1, 2015. XYZ does not owe a penalty for Sally during the
entire 12 month initial measurement period, even though it was more than the 90 day waiting period
generally allowed and she actually averaged more than 30 hours per week because of this special
option for variable and seasonal employees.
E. Option to add an “administrative period” for new variable hours and seasonal employees
As with ongoing employees, employers using measurement and stability periods may elect to add an
administrative period to allow time to calculate hours and work through the enrollment process. When
using an administrative period with new variable hours and seasonal hires, these are the rules that must
be followed:
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The administrative period cannot be more than 90 days
o The administrative period can be split and applied both and before and after the initial
measurement period (to allow calculations based on calendar months) but the total
administrative period cannot exceed 90 days
The combined administrative period and initial measurement period cannot be longer than the
last day of the first calendar month beginning on or after the first anniversary of the employee’s
start date. (Basically, the calculation period cannot be more than 13 months, rounded to the start
of the next calendar month.)
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Example: QRS, Inc. decides it needs a 60-day administrative period. This means that its initial
measurement period cannot be more than 11 months. QRS chooses to use an initial measurement
period of 11 months (rounded to the next calendar month) and a stability period of 12 months (which
is at least as long as the measurement period and not more than one month longer, as explained
above). On May 15, 2013, QRS hires Sam as on on-call lab tech and hires Scott as orderly who is
expected to work 32 hours per week.
Because Sam is a “variable hours employee” QRS will track Sam’s hours from May 15, 2013, to April
14, 2014. QRS then has from April 15, 2014, to June 30, 2014, to determine if Sam is full-time, offer
him coverage if he is full-time and have his coverage start on (or before if it prefers) July 1, 2014.
QRS will not owe a penalty for Sam during the 13-month initial measurement and administrative
periods, even though it was more than 90 days and Sam may have averaged more than 30 hours per
week because of this special option for variable and seasonal employees.
Because Scott has been hired into a job with steady hours, QRS must offer Scott coverage effective
on or before Aug. 13, 2014 to avoid the penalty (assuming a waiting period of the first of the month
after 90 days will not be allowed; there is still not an answer on this issue).
F. Transitioning New Employees into Ongoing Employee Status
Transitioning a new variable hours or seasonal employee requires testing in both the initial
measurement and subsequent standard measurement periods. If an employee is determined to be
full-time in either period, he must be offered coverage for the full applicable stability period.
Example: Ridge, Inc. has chosen to use a 12-month standard measurement period for ongoing
employees running from Oct. 15 – Oct. 14, an administrative period from Oct. 15 – Dec. 31, and a 12month stability period running from Jan. 1 – Dec. 31. For new variable hour employees, Ridge has
chosen to use an 11-month initial measurement period that begins on the employee’s start date and
an administrative period that runs from the end of the initial measurement period until the end of the
second calendar month beginning after the end of the initial measurement period. Ridge hires Tim on
May 10, 2014, and cannot reasonably anticipate Tim’s hours. Tim’s initial measurement period runs
from May 10, 2014, through April 9, 2015. Tim works an average of 32 hours per week during this
initial measurement period. Ridge must offer Tim coverage for a stability period that runs from July 1,
2015 through June 30, 2016. Ridge must also test Tim’s hours during its Oct. 15, 2014 – Oct. 14,
2015, standard measurement period. Tim works an average of 34 hours per week during this time.
Tim must be offered coverage during the standard stability period of Jan. 1, 2016 – Dec. 31, 2016.
Had Tim’s hours dropped to 28 hours per week from Oct. 15, 2014 – Oct. 14, 2015, Ridge could
terminate Tim’s coverage as of June 30, 2016.
G. Handling employees who move between classes mid-year
The agencies have said that they will issue guidance later addressing how to handle employees who
move into full-time status or who have other changes in employment status during a stability period.
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Section 7 - Applying Eligibility Waiting Periods
A. Handling new employees who work predictable, year-round hours
PPACA provides that a waiting period cannot be longer than 90 days after the employee becomes
eligible. At least for 2014, the play or pay penalty will not apply during the first 90 days of employment as
a full-time (30+ hours per week) employee, regardless how long the plan’s waiting period actually is, if the
employee is offered coverage as of the end of the 90 day waiting period.
B. Handling new employees who work variable hours or seasonally
IRS Notice 2012-59 provides that an employer may take up to the first day of the calendar month
following 13 months of employment to enroll a variable hours or seasonal employee without violating the
waiting period limit.
C. Effect of waiting periods on eligibility for the premium tax credit
An employee is not considered eligible for minimum coverage during the measurement period (including
the extended period available for seasonal and variable hours employees) and therefore will be eligible
for the premium tax credit during this waiting period if his income is less than 400 percent of the Federal
Poverty Level. However, because of the special rules that apply to new hires, the employer will not be
subject to the play or pay penalties during the waiting period.
D. Use of eligibility criteria
An employer may condition enrollment in the plan on completing reasonable criteria, such as being a 40hour per week employee or a non-union employee without violating the waiting period requirement. (Note
that play or pay penalties may still apply for failing to offer coverage to a 30+ hours per week employee.
There is a separate penalty for violating the waiting period rules, of up to $100 per employee per day.) If
an employee moves from an excluded to an eligible classification, a waiting period of up to 90 days may
be applied once the employee moves into an eligible class.
E. Other issues on waiting periods
It is still not clear whether an employer may use an effective date of the first of the month following 90
days of employment.
If coverage could be effective by the 90th day that will meet the waiting period requirement – the fact that
an employee’s coverage is delayed because the employee did not complete paperwork does not create a
violation.
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Section 8 - Applying the Play or Pay (Employer Shared Responsibility) Penalties
PPACA calls for two possible penalties, one for not offering “minimum essential” coverage and a different
penalty for offering coverage that is considered inadequate because it is not “affordable” and/or it does
not provide “minimum value.”
(A) The “no offer” penalty applies if the large employer does not offer “minimum essential” coverage.
While minimum essential coverage has not been clearly defined, it appears that very basic
medical coverage will be enough to meet this requirement. The agencies have also said that they
do not expect to apply the penalty to employers who offer coverage to the vast majority of their
employees, but exclude a few for a legitimate business reason or because of an error, but as yet
they have provided no details on how this limited exception might work. The “no-offer” penalty is
$166.67 per month ($2,000 per year) for each full-time employee who is not offered basic medical
coverage. The penalty does not apply to the first 30 employees. The penalty would not apply if
the non-offering employer had no employees who qualified for a premium tax credit.
Example: Dave’s Donuts does not offer medical coverage to its employees. Dave has 60
full-time employees and 12 part-time employees. 2 employees purchase coverage through an
exchange. Dave will owe a penalty of $5000.10/month [(60 full-time employees – 30 excludable
employees; the part-time employees are not counted for purposes of the penalty) x $166.67].
(B) The “inadequate coverage” penalty applies if the large employer offers medical coverage, but it is
not “affordable” and/or it does not provide “minimum value.” Under a safe harbor that will be
good at least through 2014, coverage is “affordable” for purposes of the employer penalty if the
cost of single coverage is less than 9.5 percent of the employee’s W-2 income. Coverage is
“minimum value” if the coverage is expected to pay at least 60 percent of claims costs.
The penalty is $250 per month ($3,000 per year) for each full-time employee who:
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Is not offered coverage that is both minimum value and affordable coverage, and
Purchases coverage through an exchange, and
Is eligible for a premium credit (so his household income must be below 400 percent of
federal poverty level)
Example: Jones, Inc. has 55 full-time employees, eight part-time employees and three
seasonal full-time employees. Jones offers coverage that is minimum value, but which is not
affordable for 10 of the full-time employees (nine of whom buy coverage through the exchange),
all of the part-time employees (all eight buy through the exchange) and two of the seasonal
employees (one of whom buys through the exchange). Seven of the nine full-time employees, six
of the part-time employees and the full-time seasonal employee who buy through the exchange
qualify for a premium credit.
Jones owes a penalty on each full-time employee who enrolls in an exchange plan and receives a
premium tax credit, so Jones owes $2,000 [8 (7 regular full-time + 1 seasonal full-time employee
who receive a premium credit; the part-time employees are not counted) x $250].
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Note that the first 30 employees do count under this “inadequate coverage” penalty. Also, if the
first (“no offer”) penalty would be less expensive than the second (“inadequate coverage”)
penalty, the employer would pay the first penalty.
For purposes of calculating the penalty, although part-time (less than 30 hour per week)
employees count when deciding if the employer is “large,” no penalty will be due if coverage
is not offered to these employees. A penalty would be due on seasonal employees while they
are working full-time, if adequate coverage is not offered.
Section 9 - Eligibility for the Small Business Health Options Program (SHOP) Exchange
Small employers may enroll in the exchange if they choose to. A “small employer” for purposes of the
SHOP exchange has 100 or fewer employees, unless the employer’s state chooses to limit SHOP
exchange eligibility to those with 50 or fewer employees.
Counting employees will matter in this situation, too, but there is very little information on how this will
work. It appears that a different counting method will apply than for determining penalties. Indications
are that part-time employees will count in some way, but there are no indications whether part-time
employees will be pro-rated.
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ATTACHMENT A
These factors are considered when deciding if a person is a common-law employee:
(A) Where is the work performed?
 If it must be performed on the hirer’s worksite, that points toward the person being an
employee
(B) How long will the relationship continue?
 If the relationship is indefinite, that points toward the person being an employee
 If the relationship is just until the task is completed, or for a specific amount of time, that
points away from the person being a common-law employee
(C) Who provides the tools and materials needed for the task?
 If the hirer provides tools, computers, desks, uniforms, etc. that points toward the person
being an employee
(D) Does the hirer have the right to require that the task be performed a certain way?
 If the hirer has the right to require that tasks be performed in a certain order, or in a
certain way, that points toward the person being an employee
 If the assignment is simply to get the task done by a certain date, that points away from
the person being a common-law employee
(E) Does the hirer have the right to assign additional tasks?
 If the hirer can add or remove tasks, that points toward the person being a common-law
employee
 If additional tasks would need to be negotiated and/or an additional charge would apply,
that points away from the person being a common-law employee
(F) Does the individual have discretion over when and how long to work?
 If the hirer sets work hours, that points toward the person being a common-law employee
(G) The method of payment (hourly or daily, or only when the task is completed)
 If the person is paid based on time (daily, hourly, weekly) that points toward the person
being a common-law employee
 If the person is paid by the job, that points away from the person being a common-law
employee
(H) Whether the work is part of the regular business of the hirer
 If the person is doing work that is part of the hirer’s core competency, that points toward
the person being a common-law employee
(I) Whether employee benefits are provided
 If employee benefits are provided, the person is invited to company events, or other
perks are provided, that points toward the person being a common-law employee
(J) Whether the hirer provides training to the individual
 If the hirer provides training, that points toward the person being a common-law
employee
(K) Whether expenses are reimbursed
 If expenses are reimbursed, that points toward the person being a common-law
employee
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(L) Whether there is the possibility of making a profit or experiencing a loss
 If the person will be paid a flat amount for the job, regardless how long it takes, that
points away from the person being a common-law employee
(M) Is there a contract and what does it say?
 What the person and the hirer think about their relationship carries some weight
Typically, common-law employees receive W-2s and independent contractors receive 1099s but that is
not a failsafe method of determining classification status.
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ATTACHMENT B
The regulatory agencies have said they are considering a month by month calculation of full-time
employees and full-time employee equivalents, which would then be averaged. If, for example, Employer
A had:
32 full-time employees in January
40 full-time employees in February
34 full-time employees in March
36 full-time employees in April
36 full-time employees in May
40 full-time employees in June
39 full-time employees in July
35 full-time employees in August
36 full-time employees in September
36 full-time employees in October
48 full-time employees in November
49 full-time employees in December
A also had:
10 part-time employees in January, who each worked 20 hours per week (or a total of 840 hours
for the month – 10 employees x 20 hours x 4.2 weeks)
10 part-time employees in February, who each worked 20 hours per week (or a total of 800 hours
for the month – 10 x 20 x 4)
10 part-time employees in March – 8 worked 20 hours per week and 2 worked 25 hours per week
(or a total of 882 hours for the month – (8 x 20 x 4.2) + (2 x 25 x 4.2)
10 part-time employees in April, who each worked 20 hours per week (or a total of 840 hours for
the month – 10 employees x 20 hours x 4.2 weeks)
10 part-time employees in May, who each worked 20 hours per week (or a total of 840 hours for
the month – 10 employees x 20 hours x 4.2 weeks)
10 part-time employees in June, who each worked 20 hours per week (or a total of 840 hours for
the month – 10 employees x 20 hours x 4.2 weeks)
10 part-time employees in July, who each worked 20 hours per week (or a total of 840 hours for
the month – 10 employees x 20 hours x 4.2 weeks)
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10 part-time employees in August, who each worked 20 hours per week (or a total of 840 hours
for the month – 10 employees x 20 hours x 4.2 weeks)
12 part-time employees in September, who each worked 20 hours per week (or a total of 1008
hours for the month – 12 x 20 x 4.2)
12 part-time employees in October – 8 worked 20 hours per week, 2 worked 16 hours per week
and 2 worked 28 hours per week (or a total of 1066.4 hours – (8 x 20 x 4.3) + (2 x 16 x 4.3) + 2 x
28 x 4.3)
10 part-time employees in November, who each worked 20 hours per week (or a total of 840
hours for the month – 10 employees x 20 hours x 4.2 weeks)
10 part-time employees in December, who each worked 20 hours per week (or a total of 840
hours for the month – 10 employees x 20 hours x 4.2 weeks)
The calculation would be:
In January, A had 32 FT and 7 FTEs (840/120) = 39 employees
In February, A had 40 FT and 6.67 FTEs (800/120) = 46.67 employees
In March, A had 34 FT and 7.35 FTEs (882/120) = 41.35 employees
In April, A had 36 FT and 7 FTEs (840/120) = 43 employees
In May, A had 36 FT and 7 FTEs (840/120) = 43 employees
In June, A had 40 FT and 7 FTEs (840/120) = 47 employees
In July, A had 39 FT and 7 FTEs (840/120) = 46 employees
In August, A had 35 FT and 7 FTEs (840/120) = 42 employees
In September, A had 36 FT and 8.4 FTEs (1008/120) = 44.4 employees
In October, A had 36 FT and 8.89 FTEs (1066.4/120) = 44.89 employees
In November, A had 48 FT and 7 FTEs (840/120) = 55 employees
In December, A had 49 FT and 7 FTEs (840/120) = 56 employees
Then total the monthly totals and divide by 12 (548.31/12 = 45.69, rounded down to 45)
A is not a large employer for the next calendar year, and no penalty will apply if A does not offer
coverage.
04-Oct-2012
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