As implementation of the Affordable Care Act (ACA) continues, IFA has urged Congress to make adjustments to the law that will benefit franchise small business owners and their employees.
The ACA’s employer mandate requires businesses with 50 or more full-time equivalent (FTE) employees to offer affordable health coverage to full-time employees and their dependents or pay significant tax penalties, and a full-time employee is currently defined as one working 30 hours per week. This definition hurts workers by resulting in lost hours and diminished paychecks. As a result, many workers with less than 30 hours per week will be forced to take second jobs and they still may not be eligible for employer-sponsored health coverage.
The ACA also contains onerous new information reporting requirements for employers and insurance carriers. The regulations require information beyond what is necessary to certify compliance with the employer mandate under the law. Additionally, the information required to be collected does not create an effective way to administer tax credits to individuals, which was a primary objective of the requirements. The requirements also put employers at risk by failing to minimize tax credits granted by mistake, which could expose employers to fines.
IFA supports legislation to restore the well-established, traditional definition of “full-time employee” at 40 hours per week, to reduce reporting burdens on business owners, and to simplify the requirements to ensure adequate and accurate information reporting.