Installment 3 - Protecting Your Business through Compliance with Employment Laws
Welcome back to the third installment of our employment law blog series! This week, we are focusing on laws which apply to businesses with 50 or more employees. Please remember all of the laws we discussed during the first two installments still apply to your business of 50 or more employees. That said, these laws are a bit more complicated, so bear with me as we unpack these essentials.
50 or More Employees
Patient Protection Affordable Care Act (PPACA aka ACA) – Governed by Health Human Services & IRS
Generally speaking, employers classified as Applicable Large Employers (ALEs) under the law must offer affordable health insurance options (or pay a penalty). These employers must also comply with strict reporting requirements. You should note that this mandate applies to 50+ “Full Time Equivalent” workers, which means even if you have very few Full Time employees, but many Part Time employees, you could STILL be considered and ALE.
The basic requirements require employers to provide access to “affordable” health insurance, which is considered minimum essential coverage (MEC) and is a minimum value (MV) plan. The problem is, most businesses do not know what these terms mean or how they apply to their workforce.
“Affordable” Health Insurance
The cost of coverage for an employee only, basic level plan can not be more than 9.86% (for plan years in effect during 2019) of the household income - ACA Affordability Threshold - SHRM article
“Minimum Essential Coverage”
The minimum benefits which must be offered and is considered the "bare bones" of a health plan. MEC covers 10 minimum essential health benefits, including things like maternity and newborn care, mental health and substance use disorder services and prescription drugs to name a few.
A person must have been enrolled in a MEC plan from 2018 and earlier in order to satisfy the Individual Mandate requirements under the ACA. However, because it was repealed the Individual Mandate will no longer apply starting in 2019. - IRS MEC chart
A plan is considered minimum value if it pays at least 60% of the total cost of covered services - Cigna inform on reform fact sheet
ALEs collect the necessary info from their workforce which include; hire dates, termination dates, salary rates, benefit costs, eligibility factors and enrollment in the plan and use this information to report on the offer of coverage to satisfy the Employer Mandate.
You will provide this information using the 1094C and 1095C forms. - IRS Instructions for Forms.
Family Medical Leave Act (FMLA) – Governed by U.S. Department of Labor
What Is FMLA?
The Family and Medical Leave Act, or FMLA, was approved in 1993 to permit employees to take a maximum of 12 or 26 weeks, job-protected, unpaid leave for medical needs of the employee, for certain family and medical reasons during a 12 month period.
Employees are considered eligible for FMLA leave if they have worked a minimum of 1,250 hours for a covered employer.
A company with 50 or more workers all living within a 75-mile radius of a primary location.
Some of the employee's duties under the FMLA include:
The employee must make a request for excused time (paid or unpaid). It may be a verbal request or a request from a representative of the employee (spouse, family member, or other responsible party).
The employee must provide a reason for the request so that the employer can determine if it falls under the provisions of the FMLA.
The employee must comply with any provisions of an employer's disability plan or leave policy under which the employee is receiving benefits.
If reasonably able to, the employee must give at least 30 days notice of need for excused time.
The employee must make a reasonable effort not to disrupt the company's operations.
The employee must provide:
medical certification within 15 days of the request.
periodic notice of intent to return to work.
a certification from Employee's Health Care Provider that you are able to return to work.
The employee must notify the employer if the spouse is also an employee of the same Company and if they are taking FMLA leave for absence for Child Care following the birth or placement for adoption or foster care or to care for a seriously ill parent during the current 12 month period.
Submit to a 2nd medical exam from a health care provider selected by the company, when required.
Cooperate in selecting a health care provider for a 3rd medical exam, when required.
We hope that these overviews have been helpful as you continue to grow your business in 2019. We run into companies who are worried about reaching that next threshold for compliance, and we want to remind you - GROWTH is GOOD! We work hard with our clients to develop strategies to keep them in compliance, while supporting their success.
We strive to provide information that is accessible, accurate, and up-to-date. That said, the law can and does change, and our individual consultations will always provide current and complete explanations of employment law and how your business can comply successfully. Join us next week for the final installment of the series, in which we will tackle the laws that apply to businesses with 100 or more employees.