Examples of Health Care Contribution Reporting

Note:  All calculations are based on the 13 weeks in a calendar quarter.

Examples of employers who do not offer to pay a portion of health care coverage:

 

Situation:  Employer has 7 employees.  Reporting:  Since the employer does not have more than 8 employees, no reporting is required at this time.  However, when exemption reduces to 6 on July 1, 2008, reporting will be required.

Situation:  Employer has 12 employees.  6 work 40 hours per week, 4 work 25 hours per week, and 2 work 20 hours per week.  Reporting:  Since the employer does not offer to pay a portion of coverage, all employees are considered as uncovered. 

ü      Total of FTEs is calculated as follows:

(6)      Full time employees = 3120 hours (6 employees x 40 hours x 13 wks)

(4)      25 hour employees = 1300 hours (4 employees x 25 hours x      13 wks)

(2)      Half time employees = 520 hours (2 employees x 20 hours x 13 wks)

Total hours of uncovered employees = 4940

ü      Divide “hours of uncovered employees” by 520 (4940 / 520) = 9.5; round down = 9 uncovered FTEs.

ü      Subtract 8 (number of exempt FTEs) = 1 FTE x $91.25 contribution rate per FTE

ü      Total quarterly contribution of $91.25.

Situation:  Employer has 10 employees.  All employees are paid a salary, based on a 45-hour week.  6 of the 10 employees have health care plans from other sources.  Reporting:  Since the employer does not offer to pay a portion of coverage, all employees are considered as uncovered, regardless of the fact that 6 employees have health care coverage elsewhere.  Hours worked for full time salaried employees would be 40 hours, which is the maximum countable per employee.   

ü      Total of FTEs is calculated as follows:

(10)          Salaried employees = 5200 hours (10 employees x 40 hours

                   [maximum countable per employee] x 13 wks)

Total hours of uncovered employees = 5200

Divide “hours of uncovered employees” by 520 (5200 / 520) = 10 uncovered FTEs.

ü      Subtract 8 (number of exempt FTEs) = 2 FTE x $91.25 contribution rate per FTE

ü      Total quarterly contribution of $182.50.

Examples of employers who do offer to pay a portion of health care coverage:

Situation:  Employer has 14 employees.  Employees (A) through (H) work 40 hours per week, (I) through (L) work 30 hours per week, and (M) and (N) work 20 hours per week.  (A), (B), and (I) have enrolled in the health care plan to which the employer contributes.  (C) and (M) are covered by their spouses’ plans.  The plan for which the employer offers to pay a portion only covers employees who work more than 25 hours per week.  Reporting:  Employees (A), (B), and (I) are covered by the plan the employer offers, so no reporting is due for them.  Employee (C) is covered by his spouse’s plan so the employer needs to get a declaration of coverage from him, but then need not report him.  Because the plan supported by the employer does not cover employees (M) and (N), those employees must be considered uncovered, even though (M) has coverage through her husband’s policy.

ü      Thus, the uncovered employees are (D), (E), (F), (G), and (H) at full time, (J), (K), and (L) at 30 hours per week, and (M) and (N) at half time. 

(5)      Full time employees = 2600 (5 employees x 40 hours x 13 wks)

(3) 30 hour employees = 1170 (3 employees x 30 hours x 13 wks)

(2) Half time employees = 520 (2 employees x 20 hours x 13 wks)

     Total hours of uncovered employees = 4290

ü      Divide “hours of uncovered employees” by 520 (4290 / 520) = 8.25;  Round down = 8 uncovered FTEs

ü      Number of FTEs equals number of exemptions.  Therefore you would report “0” as the number of uncovered FTEs. 

Situation:  Employer has 20 employees.  5 are salaried, based on a 50 hour week.  10 are full time and 5 are half time.  The employer’s plan is available to all employees, regardless of hours.  1 salaried, 2 full time and 2 half time employees are covered by the employer’s plan.  2 salaried and 1 half time employees are covered by their spouses’ plans and the employer has received declarations of coverage from all 3.  Reporting:  Uncovered employees are 2 salaried employee, 8 full time employees, and 2 half time employees.

ü      Calculations:

(2) Salaried employee = 1040 (2 employees x 40 hours [maximum countable per   

     employee] x 13 wks)

     (8) Full time employees = 4160 (8 employees x 40 hours x 13 wks)

                   (2) Half time employees = 520 (2 employees x 20 hours x 13 wks)

                             Total hours of uncovered employees = 5720

ü      Divide “hours of uncovered employees” by 520 (5720 / 520) = 11 uncovered FTEs

ü      Subtract 8 (number of exempt FTEs) = 3 FTEs x $91.25 contribution rate per FTE

ü      Total quarterly contribution of $273.75.