Fundamentals of Human Resource Management 6th Edition by Raymond Noe, John Hollenbeck, Barry Gerhart,Patrick Wright

Exercise 25

Complying with the Affordable Care Act
For employers, most of the requirements under the Affordable Care Act (ACA) involve either providing insurance that meets minimum standards or else paying the Employer Shared Responsibility Payment. Here are some guidelines for getting started:
• Keep track of the requirements on the HealthCare.gov website, especially its Small Business page. The site provides updates as regulations are developed and various requirements are phased in. It also offers links to information about tax credits, insurance exchanges, and other resources aimed at helping small businesses afford this benefit.
• Determine the number of fulltime employees. Employers with fewer than 50 full-time workers are exempt from paying the Employer Shared Responsibility Payment, and employers with 50 to 99 employees may face less stringent requirements. If some employees work part-time, count their hours to find the fraction equivalent to a full-time employee. Do not count volunteers (for example, at a nonprofit) or seasonal workers who work up to 120 days or only during holiday seasons. Workers in educational institutions who are off during the summer are not considered seasonal workers.
• Compare the cost of health insurance (taking into account any tax credits) with the cost of the penalty. Basically, the annual penalty is $2,000 times the number of full-time employees after the first 30. So for an employer with 60 full-time employees, the penalty would be $2,000 times 30 (that is 60 minus 30), or $60,000. If offering health insurance would cost more than the penalty, some employers are considering that paying the penalty would be better for business than raising prices, accepting lower profits, or cutting other costs to afford adding or continuing health insurance benefits.
• Consider the purpose of offering health insurance. For some employers, health insurance is an important part of a compensation strategy; others emphasize costs. Decisions about this employee benefit should support the organization's strategy. This may explain why, in spite of predictions that employers would shift work to part-time jobs to avoid the 50-employee threshold, the trend has been toward more full-time workers as the economy strengthens.
A company has 120 employees, but they all work half time. Does this company meet the threshold of employing 50 full-time workers Why or why not