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But how do you determine how many full-time/full-time equivalent employees you have?

Employers will need to calculate how many full-time/full-time equivalent employees they have manually each year to know if they are subject to this provision for the next calendar year. So, in order to find out if you will be subject to the Shared Responsibility provisions for 2014, the employer must calculate how many full-time/full-time equivalent employees they had in 2013. Now, let’s go over how to calculate the average full-time employees you have working for you throughout the course of the year:

  • Calculate each month individually

  • Count how many active full time employees you had working for you each month

  • Then add all of the hours paid to part-time/seasonal employee (this includes sick, vacation, PTO, bereavement, etc.) for the subject hours for calculating the full-time equivalent employees

  • You only count the first 120 hours worked by each employee (so if a seasonal employee worked 180 hours in a month, only the first 120 hours would count toward the subject hours for the full-time equivalent employees

  • After you have the subject hours for all the non-full-time employees broken down per month, divide each month’s subject hours by 120 to get the number of full-time equivalent employees you had during each month (make sure to round this number to two decimal places)

  • Next, add your full-time employees to the full-time equivalent employees for each month to give you an accurate depiction of how many full-time/full-time equivalent employees you had working for you each month.

  • Then, add up each month’s total of full-time/full-time equivalent employees to get an annual full-time/full-time equivalent employees.

  • Take the annual figure and divide it by 12 to get your average number of full-time/full-time equivalent employees per month.

IMPORTANT NOTE

If this average comes out to be greater than 50 employees, you will be considered a “large” employer under the new Health Care Reform and will be subject to its provisions. Large groups historically received lower rates for health benefits, giving them an advantage. However, fewer companies are eligible for large group status as a result of the ACA. This leaves many businesses in America only eligible for small group status. As a result, the costs of offering healthcare to employees are higher for these businesses.

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