Audio Post on full time employee testing under ACA


This user question was about inconsistencies in payroll reports that make ACA compliance testing difficult for employees who work somewhere near 130 hours per month. I referred to it as the “grey zone”.

Excerpt from my written response:

“It is an interesting question and it seems that you have a good handle on the controlling issues.

I can only add what I gather from the tone of social media posts on the topic that I might summarize as saying:

The law is not meant to accommodate employers who skirt the intention of the mandated coverage law by scheduling employers to work close to the cutoff hours, no matter how that definition eventually resolves. Either use full time employees as we commonly and clearly understand that to be (perhaps 35-40 hours) or part-time employees as we understand that role to be in common usage (perhaps 20 hours per week or less). Make it obvious so that there is no confusion and almost no testing is required to understand the legal requirement. Avoid scheduling employees to work 21-35 hours per week. Schedule employees in the grey zone between that at your own risk. Realize that management’s action to schedule workers in the “grey zone” portrays a perception that management is willing to avoid the fundamental underlying purpose of the law.  

Again, this is neither my opinion nor technical advice, but rather what I perceive to be the consensus of industry opinion.

A simple reconciliation report by an internal or external accountant might be the best solution to resolve your immediate reporting issue. In other words, get someone to offer a written opinion of the conversion of your payroll report to ACA report.”



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