QUESTION: I own an amusement park in Maine. I am the sole owner and the company is an LLC taxed as an S-corporation. I do not currently offer health insurance to my employees. Besides myself, I have 5 employees who work year-round. But during the 2015 busy season between May 1 and Labor Day (September 7, 2015), I employed an additional 48 people, all of whom work 40 hrs/wk. I have heard that there is an exemption in ObamaCare for seasonal employees. Do I have to include these employees in my calculation to determine if I am an “Applicable Large Employer”?
ANSWER: YES, YOU DO. Seasonal workers are taken into account in determining the number of full-time employees. However, if an employer’s workforce exceeds 50 full-time employees (including full-time equivalents) for 120 days or fewer during a calendar year, and the employees in excess of 50 who were employed during that period of no more than 120 days were seasonal workers, the employer is not considered an applicable large employer. To determine ALE status for 2016, you must look at your actual employee census for 2015. Keep in mind that you do not need to include yourself as an S-corporation shareholder.
An employee who works at least 130 hours in a calendar month is a full-time employee for that month. Otherwise, that employee is a part-time employee. You must convert all part-time employees to full-time equivalents (FTEs). You do that by adding all of the hours of service not accumulated by a full-time employee in that calendar month and divide by 120.
Your calculation can be illustrated as follows:
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | |
| Full-Time
Employees |
5 | 5 | 5 | 5 | 53 | 53 | 53 | 53 | 5 | 5 | 5 | 5 |
| FTEs | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 16 | 0 | 0 | 0 |
| TOTAL | 5 | 5 | 5 | 5 | 53 | 53 | 53 | 53 | 21 | 5 | 5 | 5 |
Because none of the 48 employees works 130 hours in the month of September (each only works 40 hours for the entire month because they are laid off at the end of the day on Sep 7), they are not full-time for September. They are part-time for that month and need to be converted into FTEs. Their total hours are 48 x 40 = 1920. 1920/120 = 16 FTEs. The total employees (including FTEs) for 12 months is calculated by adding all the numbers along the bottom row. That total comes to 268. The monthly average is 268/12 = 22.33. Because 22 < 50, you are not an Applicable Large Employer.
Q&A on the Affordable Care Act (“ObamaCare”) by Matt Lapointe, Esq. This is the fourth and final installment but be sure to leave your ObamaCare questions below, we will continue to answer them in a future blog series.
