|by Corey Connors
Only 13 days remain in the year for employers to finalize systems for tracking employee hours in advance of enforcement of the Affordable Care Act’s (ACA) employer mandate just over a year from now. Also expected in the next couple of weeks, if not days, are final regulations from the Treasury Department/Internal Revenue Service on employer responsibility provisions of the ACA. While SAF continues to monitor and analyze the latest developments with the ACA, I took some time out this holiday season to appeal to a higher power regarding some “asks” for greater flexibility in ACA compliance: Santa Claus. Grower Talks magazine printed the letter in their December 2013 issue, and you can read it here:Dear Santa,First, I did not forget about you or stop believing. I just wanted to save any future appeals for a time when they were most needed, a rainy-day policy. Santa, it’s pouring. So here’s my grown-up Christmas list as it relates to the U.S. green industry and compliance with the ACA. If you’re a little confused about the specifics, I will try to explain things in a way that you can understand…
Moving the definition of full-time employee from 30 to 40 hours per week—Were the North Pole in the United States, you would have long ago decided which of your elves were full-time employees by how many hours they worked per week over the course of a year. To attract and retain the best worker elves, maybe you choose to offer health benefits to your full-time employees. Because you’re so generous, you may even offer coverage to part-time elves if you could afford it within your business plan.
Unfortunately, the ACA defines full-time at a standard lower than our industry uses and coupled that with a requirement of employers with 50 or more full-time equivalents to offer coverage to those individuals. Many green industry employers will be forced to reduce employee hours or staffing levels because they simply cannot afford to provide coverage. Likewise, employees that see hours reduced may have to take on a second job or seek employment elsewhere to meet the ACA’s individual mandate to avoid their own tax penalty. Would you be able to run a functional workshop if you had fewer elf hours to utilize or had to coordinate the elves’ schedules with the Easter Bunny?
First wish: 177 members of Congress have co-sponsored legislation that would in some way address this issue. Please encourage Congress to work together to restore a definition of full-time employment that is more widely recognized by employers before the employer mandate takes effect in 2015.
Defining seasonal employment—Clearly, you have full-time elves that you employ year-round for things like sleigh maintenance, customer service and wish-list filing. But much like your operation, the green industry needs to hire additional employees before the holidays and at other peak times throughout the year to meet demand and move product. Basically, your reindeer and a florist’s delivery drivers on Valentine’s Day serve the same purpose.
The green industry doesn’t typically offer benefits to seasonal employees, as they have not been considered full-time. But because Congress did not specifically define what constitutes seasonal employment under the ACA, large employers would be responsible for offering coverage to a seasonal worker that meets the full-time standard, even if they only worked for them for a few months.
Second wish: Please ask Congress to consider the significant differences in what constitutes seasonal employment throughout various industries and to restore a definition of seasonal employment that does not recognize seasonal workers as full-time employees.
For the Administration
Employer reporting to the IRS—Were you based here, Mrs. Claus and the HR department might need to be ready for loads of paperwork. In order to administer the ACA’s employer mandate and process information on individual tax credits, the Treasury Department is proposing to collect employer information, identifying information for all full-time employees and data about the health benefits offered to employees (including employee cost, time offered, etc.) on a monthly basis. Elf by elf, every month you would need to file a report with the IRS that tells them whether you offered insurance, how much it cost them, how many hours they worked and so on.
Third wish: Please recommend to the Administration that they offer streamlined reporting processes that are viable for employers with differing workforces. While the largest employers in the U.S. have the capacity to undertake the reporting as currently proposed, virtually none of our industry’s employers have the staff or resources to meet reporting requirements.
Non-Discrimination provisions—This is a small, largely unknown provision that could have a major impact on the green industry. Let’s say you had a health plan for yourself, Mrs. Claus and your kids that you purchased or amended after March 23, 2010. You offer the same health plan to elves in management, but not to every elf because of cost.
Using rules originally designed for 401k and other retirement benefits, the IRS could determine that you’re discriminating in favor of highly compensated employees and fine you $100 per employee/per day for each elf that’s not offered health benefits, regardless of the size of your workshop. To comply, you would either need to offer every elf your same level of health benefits to continue deducting the cost as a business expense or drop your plan and purchase coverage as an individual or family.
Fourth wish: Please ask the Administration to continue non-enforcement of these non-discrimination provisions until the potential effects on businesses of all sizes can be more fully understood and necessary changes can be made.
For Green Industry Employers
2014 ACA Compliance Checklist
Utilizing SAF tools and resources to ensure compliance
Thank you for all of your consideration and help, Santa. Now that I’m of age, lets skip the milk and cookies and grab a couple cold ones. That sounds real good to me right about now.