ACA – Affordable Care Act Information for Employers in the Entertainment Industry

What is the ACA?

The ACA is federal legislation that mandates health care coverage for all Americans.  Its formal name is The Patient Protection and Affordable Care Act, and it is sometimes called the “PPACA.”

Under the ACA everyone living in the U.S. is required to have health care coverage as of January 1, 2014. The individual mandate* and its related penalties are in effect through 2018; this will not be in effect for 2019. Employer mandates continue in 2019.

The ACA also places certain requirements on the health care industry regarding availability, adequacy, and affordability of coverage.

And the ACA places certain responsibilities on Employers regarding providing health care notifications and offering health care coverage to employees.

What are employers required to do?

The legislation is lengthy and complex, but two key dates for Employers to be aware of are:

  • October 1, 2013 – All Employers who are subject to the Fair Labor Standards Act (generally doing $500,000 or more of total revenues per year) must notify employees and new hires of available health care options beginning on October 1, 2013
  • January 1, 2015 – Large Employers must offer affordable and adequate coverage to full time employees or pay a penalty, beginning on January 1, 2015

What are the notification requirements under the ACA?

The ACA Employee Notices should advise employees of the health care options available through the employer (if any), and also of the health care options available through the Health Insurance Marketplace (the “Exchanges”).

The U.S. Department of Labor (US DOL) has published 2 sample notifications:

Employers may use the US DOL forms, or may create their own forms as long as the forms provide the required information.

The AICP has designed an example form for the use by their General Members.

Who gives the ACA notification forms to the employees?

The entity that hires the workers and benefits from the work should provide the ACA Employee Notification forms to the workers along with all other payroll paperwork (I-9, W-4, timecard, etc.) at the time of hire or at the work site.

In the entertainment industry that would be the production company, the record label, the touring entity, etc.

Can the payroll company give the ACA notification form to the employees?

The ACA makes a distinction between the company that hires the Employees and the payroll company and places the responsibility for the notifications with the hiring company, not the payroll company.

Compliant notification forms are available on this page at the links above and also in the TEAM Resource Center under ACA Notification Forms.

What is a large employer?

The ACA defines Large Employers as having 50 or more Full Time Equivalent employees (“FTEs”)

  • Each employee who works 30 hours or more per week counts as one FTE in the determination
  • The hours worked by part time employees (those who work less than 30 hours per week) apply towards determining FTEs using the following formula:
    • Add all hours worked by part-time workers each week and divide by 30. (Example:  10 people work 21 hours each per week = 210 hours. Divide 210 hours by 30 = 7 FTEs for the purposes of the ACA)

Large Employer testing (determining who is a Large Employer under the ACA) will start in 2014 and will be based on “look back” periods during the year.

  • Large Employers must offer affordable and adequate coverage, to full time employees (employees who work 30 or more hours per week), or pay a penalty, beginning on January 1, 2015.
  • These penalties start with the 31st full time employee, and employers may designate a waiting period of up to 90 days for full time employees to be eligible for coverage.  (As such, Large Employers with small full time employee staffing may have no effective liability.)

Where can I get more information about employer responsibilities under the ACA?

There are a number of online resources with more in-depth information about the ACA including the website that was set up to provide information to businesses as well as the public.

You can also contact Carl Zucker at TEAM with ACA questions at: [email protected]

Or check with your health care coverage provider or other employee benefits advisors.

*For individual mandate information, click here.

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