The Affordable Care Act brings major changes for large group employers in Connecticut. Employers that meet the definition of “Large Group” will need to meet thresholds for affordable care and adequate coverage. Failure to meet the guidelines will result in penalties for the employer. Employer groups will
In Connecticut, a large group is one with more than 50 eligible employees however, the definition of a small group will change some time between 2014 and 2016 as the number will be moved groups with 100 or more eligible employees. Full time, part time and seasonal employees count toward the total amount of employees eligible. A portion of part time employees count toward the full time total. This number can be determined by multiplying the average number of hours worked per month by the number of part time employees and then dividing by 120. Example: 40 seasonal employees working an average of 90 hours a month divided by 120 40 x 90 divided by 120 = 30 extra full time employees. Multiple companies with the same EIN number must also be combined. If a there are multiple companies with under 50 employees under the same EIN, the employee count will be combined to determine groups size.
Seasonal employees’ hours are included when determining applicable large employer status. An employer will not be a large group if it employed 50 or more full-time employees for no more than 120 days in he preceding calendar year and the employees causing it to reach or exceed the 50 full-time employee threshold were seasonal for more than 120 days.
Large groups will face a penalty if they have an inadequate or unaffordable offering. The penalty will be $2,000 per employee per year, excluding the first 30 employees. The penalty will only be triggered if an employee goes to the individual exchange and qualifies for a subsidy. If an employee does not qualify for a subsidy on the exchange, the employer will not be subject to a penalty. Spousal coverage is not a requirement for employers and the will not be penalized if a spouse is able to receive a premium tax credit on the exchange.
The changes listed above will not be applicable to groups with renewals in 2013. For example, if a groups renews the group insurance plan in October of 2013, they will not be subject to the new guidelines until October 1, 2014 when the plan renews. It is likely that many groups will look at a late year renewal as a means to buy more time and avoid the new guidelines for another 12 months.