ACA Mandate: What Retailers Need to Know this Holiday Season - ShopperTrak

ACA Mandate: What Retailers Need to Know this Holiday Season

by Bill McCarthy on 10-6-16 in Industry Trends

The ESRP mandate, known as the Employer Shared Responsibility Provisions (ESRP), within the Affordable Care Act (ACA) has redefined what it means to be a full-time employee since the provision came into effect in January 2016.

As the holiday season approaches, and brings with it a substantial boost in part-time and seasonal hiring, all mindful retailers — from store managers to corporate leaders — should be aware of how the ESRP will affect hiring and staffing practices.

To avoid paying preventable fines and stay on top of changes to labor and healthcare laws, here are answers to key questions about the ESRP that will help you appropriately staff associates this holiday season:

Why should retailers care?

Because most retailers will be subject to alterations to hiring/staffing processes due to the sheer size of their company and/or the employment of part-time workers who are now considered “with full-time equivalents.” Retailers who do not comply with the ESRP will face financial consequences.

Importantly, this mandate affects not only employees at the corporate level, but store managers, as well. In addition to regular shift scheduling, retailers must closely monitor the number of hours worked by part-time and seasonal employees due to the new full-time equivalent employee metric (see below). If employers that qualify for the ESRP do not provide proper health coverage for employees, they can be fined up to $3,000 per full-time employee.

What types of businesses are affected by the ACA’s Employer Shared Responsibility Provisions?

It will affect all Applicable Large Employers (ALEs), which are companies that employed 50 or more full-time equivalent employees during the previous calendar year.

ALEs are subject to follow the ESRP that went into effect in 2016. (Only businesses with 100 or greater full-time employees were affected by the mandate in 2015.)

What exactly is the Employer Shared Responsibility Provisions?

The Employer Shared Responsibility Provisions is a requirement within the ACA that states that ALEs need to provide full-time employees or full-time equivalent employees with affordable and minimum value health care coverage. More specifically, employers need to offer to insure 95% of full-time employees. Insurance does not apply to seasonal employees.

What are the different types of employment?

Seasonal employees work 120 (consecutive or nonconsecutive) days or fewer per year. ALEs can offer to provide coverage to seasonal employees, but are not obligated to do so.

Full-time employees work at least 30 hours per week, or 130 hours per month. They are measured on a month-by-month basis, so it is important to keep track of their working hours, otherwise a seasonal employee who meets the criteria would have full-time status. For instance, if a seasonal employee worked for 30 hours every week in November, he would be considered a full-time employee for the month of November, and would therefore qualify to receive benefits and health care.

Also, be especially mindful of the total number of full-time employees if your business is at risk of being considered an ALE. If you have 49 employees, but one seasonal employee has worked 35 hours per week for the last month, you would be considered an ALE.

Part-time employees typically work 30 hours per week or fewer, and usually work in shifts. Employers are not obligated to provide benefits to part-time workers, although some do.

Full-time equivalent employees are not actually physical employees. Rather, this is a metric that is used to calculate the number of hours worked by seasonal and part-time employees, which can add up to full-time work. To find the number of full-time equivalent employees, add up the total hours worked by all employees and divide by 12 months.

This measure is important for companies that are at risk of being considered an ALE, since full-time equivalent employees are counted toward their maximum of 50 full-time employees.


 For more tips on how to prepare for holiday staffing, check out the advice in ShopperTrak’s Holiday Prep Series.

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Read more posts by Bill McCarthy

Bill McCarthy is the General Manager of the Americas, in which he oversees regional efforts pertaining to the Traffic Insights business unit.

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