As COVID-19 severely affects various industries such as hospitality and food service, your organization may be experiencing mass furloughs and layoffs to protect your business. As you and your team work through these changes, ACA Compliance and Reporting may top be top of mind, but we're here to help you with these efforts to avoid costly penalties in the future.
Here are some things to consider:
If an employee is in a stability period as Full Time and is furloughed without being terminated, ACA Compliance and Reporting states an offer of coverage must remain until the end of the stability period. If not, your organization could face penalties if the employee receives a premium tax credit through the marketplace or if offers of coverage drop below the 95% threshold.
ACA Knowledge Tip: To determine Full Time or Part Time status, many employers use the look back measurement methodology. This results in a stability period, which usually matches the look-back period, where the employee must be considered Full Time or Part Time regardless of their current number of scheduled or worked hours.
What about COBRA offers?
Reduction of hours via furloughing results in loss of health coverage (unless your organization is providing employees with coverage during furlough) which is a COBRA-qualifying event and your organization would need to offer COBRA coverage to those affected.
For Full Time employees who were furloughed or laid off and are being rehired within 13 weeks of their last day at work, your organization will need to ensure that their most recent offers of coverage remain in place.
This topic can be confusing and difficult to navigate. Let us help! Call us at (508) 655-3307 or email info@benefitscape with any questions. We're here to help!