Q: In 2014, the new healthcare mandate will begin. How will this affect my business?
A: This is not a one size fits all answer. Some employers will be unaffected, while others will see substantial changes. Generally, those with over 50 full-time equivalent employees will have to address these concerns.
Q: What is a “full-time equivalent” (FTE) employee?
A: An FTE is the number of hours every person in the business works added together. This sum is divided by 2080. The resulting number reveals the number of FTE’s and therefore whether the employer is considered a “large” employer or not.
Q: If I am a large employer, can I eliminate the need for employee healthcare by reducing everyone to 30 hours per week?
A: No, if an employer has over 50 FTE employees by calculation, the employer must generally provide healthcare for their employees at an affordable cost to the employee.
By: Basi & Basi at the Center for Financial, Legal and Tax Planning for Transworld M&A Advisors