How to calculate average number of employees per month for health care mandate

If a business is considered “small,” it is not required to offer a health care plan. For large companies of more than 50 full time equivalent employees (FTE’s), offering coverage is mandated to avoid paying steep penalties. A full time worker is defined as someone who works more than 30 hours per week. However, part-time and seasonal personnel can factor in to this calculation.

To determine whether your business will qualify as a small or large employer, check out this detailed Q&A from the IRS.

If I Am Close, Why Not Just Reduce Hours to Avoid the Mandate?

There are many businesses on the cusp of these staffing numbers that are contemplating reduction of employee hours in order to avoid being required to offer coverage. This may prove to be breach of ERISA Section 510, which basically says it is illegal to make changes (like cutting back hours) with the intention of prohibiting an employee access to their health insurance plan. Although some believe it will be hard to prove, employers may be on questionable ground with this strategy.

So, the question still remains…are you greater than 50?