ACA small emplr pays ins for two emple - does he pay for new guy?

[schirallicpa]

My client is a small contractor.  Has 5 regular employees that have been there forever.  2 of those guys he's always paid for their insurance.  the rest are on the spouses' plans.  Forever, he's hired on and off a 6th guy.  This 6th guy is never permanent, for whatever reason.  He's kind of the extra to help thru heavy work seasons.  These are the kinda guys that stay around of 6 - 12 months and then move or find another job.

 

Anyway - he has been told that he must provide insurance for this extra guy since he pays insurance for his 2 other regular guys.

 

I am far from expert in this area, having only recently taken some CPEs.  I appreciate any help.

 

[ILLMAS]

Number one, your client does not fall under ACA, however he does have to follow PPACA as a result of ACA.

[schirallicpa]

right - i know he's not required to have ins.  the question is - because he is offering to 2 , does he have to offer to all?

[ILLMAS]

I hope this helps you out, I have done some extensive research for one of my client:

 

For a plan to be considered non-discriminatory with respect to eligibility, it must pass one of two numerical “coverage”

tests. The two tests are:

 

(1) 70% of all employees are covered under the plan, or

 

(2) the plan covers at least 80% of eligible employees and 70% of all employees are eligible for coverage. If the employer fails either of the above tests, a plan will be considered as providing discriminatory benefits. Some employees can be excluded from the eligibility tests.  They include:

 

•Employees with less than three years of service at the beginning of the plan year;

•Employees who are younger than age 25 at the beginning of the plan year;

•Part-time or seasonal employees;

•Employees who are covered under a collective bargaining agreement; and

•Nonresident aliens who receive no income from a U.S. source.

Edited December 3, 2014 by jklcpa
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