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Full-Time vs Part-Time Benefits: Why It Matters

January 1, 2023/in ACA Compliance, News, Voluntary Benefits

Employers need to make sure they are compliant with the Affordable Care Act (ACA) and the employer shared responsibility regulations, also known as “the employer mandate” or ALE. This means that employers must consider many factors when deciding between offering full-time vs part-time benefits, including the costs associated with providing health coverage and other employee benefits.

In this blog we’ll explore the differences between full-time (FT) and part-time (PT) benefits and why it matters for business owners.  

What is the ACA’s Employer Mandate?

The Affordable Care Act’s (ACA) Employer Mandate is a federal law requiring businesses with 50 or more full-time employees to provide health insurance coverage to those employees, or face penalties. The ACA requires employers to offer minimum essential coverage that meets certain affordability and value requirements. Employers must also comply with certain reporting requirements so the government can keep track of employer compliance with the law.

The Employer Mandate is one of the most important elements of the ACA, as it helps ensure that more Americans have access to quality health care coverage. The goal of this law is not only to ensure that employers are providing health insurance to their employees, but also to make sure those plans are comprehensive and affordable.

The ACA’s Employer Mandate requires Applicable Large Employers (ALEs) to provide their full-time employees with affordable Minimum Essential Coverage (MEC), meeting Minimum Value (MV) requirements, that covers at least 95% of the workforce.

The Employer Mandate is enforced by the Internal Revenue Service (IRS), and while penalties can be imposed if an employer fails to comply with the law, there are some exemptions that may apply. For example, employers who offer health coverage but do not meet minimum value requirements may qualify for a “hardship exemption.” Additionally, employers with fewer than 50 full-time employees are not subject to the Employer Mandate.

What is ALE (Applicable Large Employer)? 

Applicable Large Employer status is a designation given to certain employers by the Internal Revenue Service (IRS) under the Affordable Care Act (ACA). The ACA requires applicable large employers to offer health insurance coverage to their full-time employees or pay a penalty. 

An applicable large employer is any business that has at least 50 full-time employees, or a combination of full-time and part-time employees that are equivalent to at least 50 full-time employees.

What Qualifies an Employee as Full-Time?

Generally, an employee is considered full-time if they work an average of 30 or more hours per week. Certain government agencies may have specific definitions to define full-time employees, such as those that qualify for unemployment benefits. Depending on the situation, an employee may also be considered full-time if they are classified as a salaried or exempt employee, meaning they would receive a set salary regardless of the number of hours worked. 

Overall, being aware of an employer’s definition of full-time employment can be beneficial for both employers and employees. Knowing what qualifies as full-time can ensure that employees receive the correct benefits and employers are in compliance with any applicable regulations.

What Benefits are Generally Offered to Full-Time Employees?

Full-time employees typically receive benefits such as health insurance, vacation time, 401(k) plans, and other company-sponsored retirement plans. Some employers may also offer tuition reimbursement programs, life and disability insurance, flexible spending accounts (FSAs), and employee discounts. The specific benefits offered to full-time employees vary greatly depending on the employer and the industry. 

Additionally, many organizations are now offering mental health support, remote working options and other perks that may benefit employees in these uncertain times. 

Full-time employees must be offered benefits if the employer is subject to ALE, while part-time employees are not eligible for coverage until they meet certain hours thresholds. Employers should carefully consider how their benefits packages will affect the ACA and ALE compliance in order to avoid penalties or fines that could arise from noncompliance.

What Qualifies as Part-Time Employment and Benefits?

Part-time employment typically refers to a worker who is employed for fewer hours per week than a full-time worker. Some employers may offer part-time employees the same benefits as their full-time counterparts, including health insurance, paid time off, and retirement savings plans. However, there can be differences in the amount of benefits offered depending on the employer. For example, some employers may offer reduced health care plans or no retirement savings plan to part-time employees. In addition, some employers may cap the amount of paid time off for part-time workers. It is important for potential and existing part-time employees to know their rights under the applicable labor laws. 

Additionally, employers need to be aware of the different rules for eligibility for full-time and part-time employees. For example, if an employer offers a health plan that is limited to full-time employees but also has part-time employees who work more than 30 hours per week, they may not be eligible to receive coverage under this plan. This means that employers must be very careful when establishing eligibility criteria for their benefits plans and make sure that they are compliant with the ACA and ALE regulations.

How PT vs FT Employee Benefits Impact Retention

Employers should also consider how their employee benefit packages affect their employee retention strategies. Offering attractive benefits to full-time employees can help retain them, while providing minimal or no benefits to part-time employees may lead to high turnover rates. Employers need to assess their workforce needs and determine if it is necessary to offer benefits to part-time employees in order to maintain a healthy and productive workforce.

Things to Consider

Overall, employers must take into account the costs of providing employee benefits, as well as the compliance requirements of the ACA and ALE when deciding between offering full-time vs part-time benefits. Employers should also consider their employee retention strategies and make sure they are providing adequate benefits to ensure long-term loyalty from both full-time and part-time employees.  With proper planning, employers can create an effective benefits package that meets the needs of their workforce while remaining compliant with all applicable regulations.

The Affordable Care Act (ACA) requires employers to calculate the number of employees that qualify as full-time and full-time equivalent for each month in order to determine if they are an Applicable Large Employer (ALE). This calculation involves taking the total number of full-time designated employees, plus all non-full-time designated employees’ hours for the month and dividing by 120. The resulting number is then added to the full-time employee count to determine ALE status. 

To ensure accurate calculations, employers can outsource their ACA compliance process to a service provider who will measure workers’ hours of service and calculate FTEs and ALE status on their behalf. Accurately calculating ALE status is essential for employers to minimize potential penalty exposure from the IRS.

To Sum It Up

The decision to provide full-time or part-time benefits to employees is a complex one that requires careful consideration of various factors such as cost, compliance with ACA and employer shared responsibility regulations. Employers should look into their options and evaluate which option is best for them in order to ensure they are providing their employees with quality benefits. Ultimately, offering the right benefits to employees can help businesses attract and retain talent.

If you’re a business owner that needs help navigating FT/PT employee benefits, reach out to us today!

https://www.sbmabenefits.com/wp-content/uploads/2022/12/iStock-1341621207-2.jpg 1414 2121 Nathan Ines https://www.sbmabenefits.com/wp-content/uploads/2021/12/SBMA_Website-Logo_250x150.png Nathan Ines2023-01-01 07:00:332022-12-15 13:00:40Full-Time vs Part-Time Benefits: Why It Matters

How Does SBMA Support Employee Benefits Administration?

May 17, 2022/in Employee Retention, News, Voluntary Benefits

Employee benefits administration can be a pain for any HR department. At SBMA, we aim to simplify the process by giving you access to everything you need in one place. Our enrollment portal houses everything you need for:

  • Onboarding 
  • Offboarding 
  • Enrollment 
  • Portal assistance 

Our employee benefits professionals have the knowledge and expertise that can save your company time and money. We aim to offer comprehensive benefit management, not only with our portal, but also as it pertains to ACA compliance, providing low-cost options, and offering fast and reliable service.

The convenience of SBMA’s employee benefits administration support allows your Human Resources department to work on their daily tasks and responsibilities without the headache of a difficult benefits administrator. Our one-stop-shop portal helps reduce the paperwork your HR department has to deal with and therefore, improves your bottom line.

Employer Resources

 

Our website is equipped with plenty of employer resources that give easy and secure access to your records and the ability to make plan changes at your fingertips (i.e. (enrollment portal, adding dependents, employee termination, and more). Adjusting benefit plans couldn’t be any easier with SBMA. Additionally, every task includes video tutorials, walkthroughs, and instructions.

 

Watch the videos below to see just how easy navigating our portal is. 

Enrollment Portal Walkthrough

 

Adding Dependents Walkthrough 

Termination Walkthrough 

Partnering with us takes the burden off of your HR department and places it on us, your benefits administrator. Ready to get started? Reach out to us today. 

In this effort to streamline and simplify our client’s benefits experience, we’ve partnered with Transamerica. Transamerica’s partnership with SBMA brings you quality, affordable health insurance that fits into your budget and removes the hassle of excess submissions to insurance carriers. Take a look at the full explanation of how this partnership impacts your benefits administration here.

 

https://www.sbmabenefits.com/wp-content/uploads/2022/05/iStock-638882946.jpg 1414 2121 maddie https://www.sbmabenefits.com/wp-content/uploads/2021/12/SBMA_Website-Logo_250x150.png maddie2022-05-17 07:00:312022-08-24 11:11:32How Does SBMA Support Employee Benefits Administration?

Difference Between Hospital Indemnity and Accident Insurance?

October 26, 2021/in MEC, Voluntary Benefits, Worksite Benefits

Navigating insurance policies can be challenging for anyone. There isn’t a way to predict the future, so how can you know what you will need? There are so many options available, how can you decide?
Voluntary benefits can help supplement insurance policies that may not cover all of your employees’ needs. There are many options when it comes to voluntary benefits with a few differences. What’s the difference between hospital indemnity policies and accident insurance? Here’s a breakdown.

Read more
https://www.sbmabenefits.com/wp-content/uploads/2020/09/pexels-oles-kanebckuu-127873-1-scaled.jpg 1920 2560 Amanda Rogers https://www.sbmabenefits.com/wp-content/uploads/2021/12/SBMA_Website-Logo_250x150.png Amanda Rogers2021-10-26 14:42:242021-12-03 11:34:23Difference Between Hospital Indemnity and Accident Insurance?

Why You Should Offer Voluntary Benefits Plans

September 12, 2021/in MEC, Voluntary Benefits, Worksite Benefits

Voluntary benefits are referred to as employee-paid benefits or supplemental insurance. They are benefits offered by employers to their employees at no additional cost to the employer. The employees pay the full cost of the plan, but it’s made available to them through their employer.

Read more
https://www.sbmabenefits.com/wp-content/uploads/2021/08/What-are-voluntary-affordable-benefits-plans-and-why-should-you-use-them-copy.png 924 1640 Amanda Rogers https://www.sbmabenefits.com/wp-content/uploads/2021/12/SBMA_Website-Logo_250x150.png Amanda Rogers2021-09-12 21:30:002021-11-30 16:48:01Why You Should Offer Voluntary Benefits Plans

How to Make the Most out of Your Telehealth Visit

July 25, 2021/in Telehealth, Voluntary Benefits

While telehealth existed long before the onset of the pandemic, patients’ lack of accessibility to their doctors’ offices meant that telehealth grew exponentially over the past year and a half. What once may have seemed like an unnecessary benefit has now become a critical resource to most health care systems.

Read more
https://www.sbmabenefits.com/wp-content/uploads/2021/06/Copy-of-2.png 924 1640 Amanda Rogers https://www.sbmabenefits.com/wp-content/uploads/2021/12/SBMA_Website-Logo_250x150.png Amanda Rogers2021-07-25 12:16:002021-11-30 16:38:29How to Make the Most out of Your Telehealth Visit

Hospital Indemnity Policies: What You Need to Know

June 6, 2021/in MEC, Voluntary Benefits, Worksite Benefits

Health insurance is hardly a one size fits all industry. Different people need and want different coverage based on their lifestyle and what they can afford.

Read more
https://www.sbmabenefits.com/wp-content/uploads/2021/05/Copy-of-Copy-of-Copy-of-3.png 924 1640 Amanda Rogers https://www.sbmabenefits.com/wp-content/uploads/2021/12/SBMA_Website-Logo_250x150.png Amanda Rogers2021-06-06 15:19:002022-05-06 13:16:32Hospital Indemnity Policies: What You Need to Know

Voluntary Benefits: A Complete Guide

May 23, 2021/in ACA Compliance, COVID-19, Employee Retention, Healthy Living, MEC, Voluntary Benefits, Worksite Benefits

Voluntary benefits are often offered as an option by employers to their employees. This health coverage option exists at no cost to employers and is therefore often a no-brainer option to offer employees. We’re sharing everything you need to know about voluntary benefits in our guide.

Read more
https://www.sbmabenefits.com/wp-content/uploads/2021/04/Copy-of-Copy-of-2.png 924 1640 Amanda Rogers https://www.sbmabenefits.com/wp-content/uploads/2021/12/SBMA_Website-Logo_250x150.png Amanda Rogers2021-05-23 21:44:002021-12-03 11:38:29Voluntary Benefits: A Complete Guide

What is the Difference Between mHealth, eHealth, Telehealth, and Telemedicine?

March 28, 2021/in ACA Compliance, Healthy Living, MEC, Telehealth, Voluntary Benefits, Worksite Benefits

The digital health world has seen massive growth over the last year. It’s important to understand what various virtual healthcare terms mean. eHealth, mHealth, telehealth, and telemedicine are used to describe the use of mobile and desktop technology for patient management. These terms are used interchangeably at times, however they each represent a different aspect of technology and healthcare.

Read more
https://www.sbmabenefits.com/wp-content/uploads/2021/02/Copy-of-Copy-of-Template-2_-colored-image-3.png 1080 1080 Amanda Rogers https://www.sbmabenefits.com/wp-content/uploads/2021/12/SBMA_Website-Logo_250x150.png Amanda Rogers2021-03-28 09:47:002022-02-11 10:08:40What is the Difference Between mHealth, eHealth, Telehealth, and Telemedicine?

How Can You Add Value to Your Existing Benefits Plans?

March 14, 2021/in ACA Compliance, MEC, Voluntary Benefits, Worksite Benefits

Benefit plans serve as a great way to provide value to employees beyond their salary. Because benefits are becoming increasingly important, it’s important that you give your employees the option to tailor their benefits to their needs. At SBMA, we believe in meeting your employee’s medical needs with additional benefit options. We offer our clients the option to choose various voluntary/worksite, ancillary, and virtual health benefit options. 

Read more
https://www.sbmabenefits.com/wp-content/uploads/2021/02/Copy-of-Copy-of-Template-4_6_-white-outline-logo-colored-image-gray-overlay-40-7.png 1080 1080 Amanda Rogers https://www.sbmabenefits.com/wp-content/uploads/2021/12/SBMA_Website-Logo_250x150.png Amanda Rogers2021-03-14 08:44:002021-11-30 15:57:37How Can You Add Value to Your Existing Benefits Plans?

How Do Benefits Improve Employee Morale?

March 7, 2021/in Employee Engagement, Employee Retention, Healthy Living, MEC, Personal, Voluntary Benefits, Worksite Benefits

Sixty percent of employees rated benefits as a very important contributor to job satisfaction. With that many employees placing value on employee benefits, it’s important that you, as an employer, ensure your benefits are set up and attract and retain the best employees. According to Career Builder, only 49% of employees are satisfied with their current benefits, which means you have the opportunity to make your benefits even better to appeal to 51% of your employees!

Read more
https://www.sbmabenefits.com/wp-content/uploads/2021/02/Copy-of-Template-2_-colored-image.png 1080 1080 Amanda Rogers https://www.sbmabenefits.com/wp-content/uploads/2021/12/SBMA_Website-Logo_250x150.png Amanda Rogers2021-03-07 16:33:002021-12-03 11:36:41How Do Benefits Improve Employee Morale?
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  • brokers explaining ACA FAQsFAQs: ACA and ALEs – What You Need to KnowMarch 5, 2023 - 9:00 am
  • Full-Time vs Part-Time Benefits:Full-Time vs Part-Time Benefits: Why It MattersJanuary 1, 2023 - 7:00 am
  • Affordable care act ACA or Obamacare and stethoscope.Received an ACA Penalty from the IRS? Here’s What to DoDecember 25, 2022 - 12:25 pm

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