California health insurance
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California Group health insurance
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Part Time Employees and Group Health Eligibility
Your Guide to Part Time Employees and California Health Insurance

There is a great deal of confusion these days regarding part time employees
and health insurance.
It's coming up in more conversations these days and for good reason.
What are the rules for health insurance when it comes to part time
employees?
It's a good time to answer them since the rules are changing.
And the changes might mean money out of your pocket.
Many employers are unaware of the new changes created about the ACA law in
regards to part timers.
"We're a small company. That doesn't affect us!" Wrong.
Due to the ACA law, some calculations now look at your part time employees,
others do not, and some are so complicated, we're not even sure how they apply.
First, what is a part-timer in California
A part time employee is an employee that works under 30 hours a week.
Generally part-time eligibility starts at 15 hours/week but some carriers
have more flexible bottoms (lower).
The complicated calculation mentioned above has to do with 30 hours during
what time frame.
Last quarter? Past year? Right now?
There are dozens of pages that deal with this calculation and our
recommendation is to offer your best estimate. We know...not very scientific but
there are actually multiple ways to run it.
Carriers will have different requirements but as a rule of thumb, it's based
on hours worked for 1/2 of prior calendar quarter.
Let's assume we have our employees that are clearly under 30 hours per week
on average.
These are w2 employees, not contract or 1099 labor. Contractors or 1099
do not figure into any calculation due to their status.
An employer is not responsible for offering health insurance to these
individuals.
That being said, be careful of the new penalties for employers paying
towards individual plans!
That penalty was all the rage July of 2015. How quickly things
change...
The new QSEHRA from Employers
A recent law created the new
QSEHRA (Qualified Small Employer HRA) which
allows eligible employer to pay towards an employee's individual/family health
plan and deduct it.
We can help you investigate whether this option might work for you with
part-time and full-time employees.
Just call us at 800-320-6269 or
email us and
we run through the new law based on your needs.
You can always run through quotes here:

What are the rules for offering health insurance to part-timers
There are two important considerations.
Officially, a company is not required to offer health insurance to part time
employees even if they offer it to full time employees.
You can find more information on whether a
company is has to offer health insurance to employees here but..
A company can CHOOSE to offer part-timers health insurance. In this
case, the benefits and contribution must be the same as offered to full
time employees.
If there is a waiting period for being eligible for benefits, the move from
part time to full time eligibility (if part timers are not covered) is when the
waiting period starts for benefits. Not the original hire date.
Quick note: There are now penalties for not offering health insurance
to full-time employees down to 50 employees starting Jan 2016.
More detail here but in a nutshell:
- If company offers no health insurance, penalty is $2000/employee after 1st
30 eligible employees
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We can help you evaluate these different strategies to see what is priced
best at 800-320-6269.
So, the penalties do not apply to part-timers. How do part-timers fit into
the equation??
The law DOES include the part-time employees to calculate the total # of
employees.
This is used to determine if a company is in the penalty range.
For example:
Let's say we have a company with 40 full time (30 hours) employees and 100
part time employees at 15 hours.
The company might think, "Great...I
have no penalty either way!"
Wrong.
The law looks at Full-time equivalents.
That's a fancy way of saying that the 100 part time employees are the
EQUIVALENT of 50 full time employees.
Basically, a company looks at the total
employed hours during a week and divides by 30.
That's your equivalent full-time number.
If it's 50 or more, you may be facing a penalty for not offering employer
sponsored health insurance.
We were discussing these new penalties with a company and the owner said,,
"I'll just wait till December and then drop payroll below 50 employees or
drop hours down to part time"
That won't work. The look back period is generally the preceding year.
The baseline employment is already in place for the most part.
What can Employer do for Part Timer Health Insurance
It's pretty black and white. Careful - many companies are swimming in
sea of gray.
An employer can either offer part timer employees group health coverage on
par with full-time employees or NOT.
This is equally true for full time employees!!
$100 per employee per day! Up to $36K per employee annually..
An employer should have nothing to do with an individual/family plan for
their part timers unless it's processed through the QSEHRA which we can help you
set up.
Don't even say "This amount is for you to get your own health plan".
What can part time employees do for coverage
Part timers that are not offered group health plans can get their own
individual/family plans and we can help them through that entire process.
In 5 minutes we can size up tax credits, rates, and plans suited their
needs and budget.
Our services are free. Please forward them to us and we'll help them.
800-320-6269
Make sure to keep an arm's length distance from their health insurance
options and associated cost.
There are tax credits available to individuals and families now.
What
about dropping full-time employees to part-time to avoid the penalty
This has been in the news quite a bit with large companies dropping hours
down to part-time status.
Again, the penalty may not apply to your part time employees but total
payroll hours/30 per week will still factor into whether penalties apply to your
full timers..
50 or more full time equivalents starting Jan 1st, 2014 = potential penalty
We can help you look at your particular situation to see what the most cost
effective option is available including::
- Estimate of penalty based on current set-up
- Estimate of group health coverage versus penalty
Current trend for part-time employment
- We're seeing many employers not offer part-time coverage.
- Some employers are moving some full-time employees to part-time
- Some companies are reducing employment to below 50 cap (if they're close to
cap)
- Many employers we come across are still paying towards employees health
plans not realizing that they are accruing a significant penalty right NOW!
If you do not want to offer part-time (or full time employees) employer
sponsored health benefits, send them to us.
We'll get them the best plan, rate, and tax credit available on the
market.
For more complicated questions on full-time to part-time, dropping hours or
employee count, this gets a little trickier.
Call us and we'll walk through the options. Our services are free to you.
For employees that make very little, we can also investigate whether they
might qualify for a tax credit through Covered California.
Contact us at 800-320-6269 to go over the options available to you.
Related Pages:
Small Business Health Quote With Tax Credit
Calculations
Individual Family Plans for Employees
without Group Health Plan Quote
Again, there is absolutely no cost to you for our services. Call
800-320-6269 Today!