Determining the # of Full-Time Equivalent Employees for your Business - For Benefits

Moving into 2014, employers, CFO’s, and HR teams are being hit with more and more reporting and compliance issues as a result of the PPACA regulations. What this means, is that more hours (which are most likely non-contiguous hours) will be spent on tracking employee work information. Determining the total number of full-time and full-time equivalent employees is one of the first things employers will have to track. We have recently received guidance on this process and this message will outline these guidelines in what we hope is plain English. As an employer, you do not have to provide coverage if you have less than 50 full-time equivalent employees. However, if the number of your full-time employees is less than 50 but you have other part-time, seasonal, or variable hour employees, you may meet the large employer threshold. Finding this number is done by taking the total number of hours worked by all P/T (part-time) employees in a month and divide by 120 to get the number of full-time equivalents. # of P/T Hours worked in a month = # of Full-Time Equivalents (FTE’s) 120 Let’s look at an example: An employer has 30 F/T employees and 25 P/T employees. Adding them together makes 55 total employees. BUT, they are not all F/T employees and the P/T’s work a total of 1000 hours last month. Using the above equation we find this: 1000 = 8.33 FTE’s 120 So, for that month this employer has 38 FTE’s (30F/T’s + 8FTE’s). They are still a small employer. What you will need to do is average this number for the year to determine whether or not you are a large employer. HOWEVER, for determining this in 0213 you will be allowed to use a 6 month average (any 6 months you want to choose from!). After this, you will have to use a 12 month average. This give s a little leeway. To help make this easier, we have provided worksheet for you to use. It does the math for you! If the number turns out to be 50+, congratulations. You are now a large employer in the eyes of the IRS. If you have any questions on this subject or other subjects related to benefits, please feel free to give us a call. “Strategic Benefits Group, where your greatest benefit is our experience.” My very best, Sean P. Donovan, CHRS BENEFITS ADVISOR "Your greatest benefit is our experience...". 1582 Village Square Blvd Tallahassee, FL 32309 P - (850) 422 9600