In the last blog ,The (not so) Simple methods to test for FTEs...,"we discussed both the “stability” period and the “measurement” period. As is the case in other Federal programs, consistency in the measurement periods is the key. Whatever period you select, (between 3 and 12 months), stay consistent in consecutive periods.
What sizes of businesses are pertinent to the administration of the plan?
There are 4 categories of size recognized under the Affordable Care Act.
- Self Employed
- Under 25 FTEs
- 25 to 50 FTEs
- Over 50 FTES
Each of these categories is affected in some way by the ACA, but for our purposes today we will only show the determination of Full Time Employees (FTEs).
Once you have determined your “measurement” period, you must follow these rules to determine how many FTEs you have employed.
- A full time FTE is described as any employee that works at least 30 hours per week, or 130 hours per month. A caveat to this rule is that workers that are receiving payment for vacation, sickness, disability, jury duty, military duty, or leave of absence are included in these calculations.
- All employees that do not have at least 30 hours per week, or 130 hours per month are put into a pool to sum their total hours. From this pool, all hours are added for the period counted and if the weekly hours are counted, this total is divides by 30, and if monthly hours are counted, 130 divide this total. (i.e. 20 employees working only 15 hours in a month totals 300 hours-next, divide 300 by 130 to get 2.37-remember, fractions don’t count, so that adds 2 FTEs)
That covers the FTE count, next, we will dive into the four statuses of employee counts and what the ACA means for each.