Often overlooked, the Employment Type field in the Employee Maintenance window of Microsoft Dynamics GP (Great Plains) can ease tracking of your employee classification for the IRS reporting mandated by the Affordable Care Act.
Yes, GP Payroll users, we must be focusing on such details now. Like it or not, the IRS penalty-assessment period for employer noncompliance with the reporting requirements of the Affordable Care Act (ACA) starts January 1, 2015 for most companies.
According to the ACA, an employee needs to be designated as being a full-time employee or a variable-hour employee. This designation is important because it dictates how fast an employer is required to provide for an employee health care coverage that is deemed affordable.
In most payroll systems, you can designate what the ACA calls variable-hour employees as part-time employees. In the Payroll module of Microsoft Dynamics GP, you should designate variable-hour employees as either Part-Time Regular or Part-Time Temp in the Employee Maintenance window's Employment Type Field.
Keep in mind that the ACA definition of a full-time employee is not the same as what we have known a full-time employee to be.
What to know about 'Full Time'
For ACA reporting, an employee is considered full-time from date of hire if they are expected to work, on average, at least 30 hours per week. Under the ACA, that employee must be offered a qualified health care plan within 90 days of their hire date or the first day of the month preceding their hire date. In some states – California, for example – that requirement has been reduced to 60 days.
Using the Employment Type field of Full Time Regular or Full Time Temp would allow you to designate these types of employees.
What to know about 'Variable Hour'
On the other hand, if at the time of hire it cannot be reasonably determined that an employee will work an average of 30 hours per week, those employees can be treated as variable-hour employees subject to a measurement period to determine their individual eligibility to employer provided health care coverage.
Measurement Period 101
Also called a look-back measurement period – whether it be a standard measurement period or an initial measurement period – this established timeframe for determining an employee’s eligibility for employer provided health care benefits will be applied to test employees in the variable-hour category.
If it is determined that they meet the ACA standard as being full time, those employees will be offered coverage during a stability period regardless of the number of hours they work as long as they remain employed.
Standard measurement periods are ongoing, so employees will be continuously tested for eligibility.
By utilizing the Employment Type field within Microsoft Dynamics GP in this manner, you will be able to build SmartList queries to better align the tracking requirements of the Affordable Care Act. Utilizing this field will go far in helping you break down your employees into the correct category.
This adjustment is one of five we recommend for review in prepping for ACA reporting in-house with your Microsoft Dynamics GP system. For summaries of the other four adjustments, and context for all, you may want to review our recent post titled A Setup Guide for ACA Tracking in Microsoft Dynamics GP.
If you need a system enhancement to format ACA measurement periods for the employee data that you are collecting, you may want to review the GP Payroll add-on our company offers organizations that process payroll in-house using Microsoft Dynamics GP (Great Plains).
For details on our core application, Sypnio ACA Reporting, and on the enhancement for companies with multiple GP Payroll databases, Sypnio ACA Database Combiner, please visit www.sypnio.com/products.
If you would like a demo of Sypnio ACA Reporting, contact us in one of the following ways:
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