September 14, 2012 (PLANSPONSOR.com) – The Patient
Protection and Affordable Care Act (PPACA) presents challenges for employers with
Under PPACA, employers must offer health insurance to
employees who work 30 hours or more, but employers with seasonal, temporary or
part-time workers may find challenges in tracking this. “For those groups, it’s
much more difficult to determine who is working on average 30 or more hours a
week,” Amy Bergner, partner at Mercer, said during a webinar hosted by the
According to survey results from Mercer, retail and
hospitality, health care services and government are the most affected industries.
Many of these employers – 66% of retail and hospitality, 59% of healthcare services
and 40% of government – reported that part-time employees make up at least 10%
of their workforce.
Mercer found that 46% of retail and hospitality employers do
not offer coverage in a qualified plan to all employees working an average of
30 or more hours per week, while 30% of government employers do not.
Employers that do not comply with changes under PPACA face
shared responsibility penalties. “The bad news is we have very limited guidance
[on how to comply],” Bergner said. The good news is that these changes do not
take effect until 2014, she added.
The Internal Revenue Service (IRS) has set out safe harbors
for plan sponsors to use for variable-hour and seasonable employees. These safe
harbors allow a look-back measurement period of three to 13 months to determine
an employee’s average hours, and require a “stability” period of at
least six months (and no shorter than the measurement period) when employees
determined to work 30-plus hours must be offered coverage.
The safe harbor also allows an administrative period up to
90 days. “This guidance allows a gap between the measurement period … and the beginning
of a stability period,” Bergner said, adding that it appears many employers are
already using these safe harbors.
Bergner emphasized that employers should ensure that their
approach complies with the safe harbor provisions.