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National Restaurant Association - Health care advocacy focuses on large-employer calculation

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Health care advocacy focuses on large-employer calculation

Restaurant operators should add “applicable large employer” to the list of terms they’ll need to become familiar with as they implement the 2010 health care law. It’s an important term, as restaurants that meet the definition will be required to offer health care coverage to full-time employees and their dependents, or face penalties.

So what is an “applicable large employer”? In general, it’s the health care law’s label for businesses that employ an average of at least 50 full-time-equivalent employees on business days during the preceding calendar year.  But determining whether your restaurant meets the applicable large employer definition is more complicated than simply counting your full-time employees. It requires a detailed annual calculation based on significant data from the previous calendar year.

Simplifying the formula is a key goal for the National Restaurant Association. In its current form, the calculation is unnecessarily complicated and difficult to apply to the restaurant industry, which relies heavily on part-time and seasonal employees.

For example, when applying the formula, employers must take into account

  • How many employees—including seasonal employees—averaged at least 30 hours per week or 130 or more hours per month during each of the preceding 12 months.
  • The hours worked by part-time employees

That’s just a sampling of what’s required. Detailed information on how to determine whether a restaurant is an applicable large employer is available in the NRA’s newly updated Health Care Law Primer.

In the more than three years since the health care law was passed, the NRA has advocated for more flexibility and reasonable changes. In addition to simplification of the large-employer calculation, the NRA is asking Congress to change the law’s definition of a full-time work week from 30 hours to a length more in line with accepted business practices, and to repeal a provision that requires employers with 200 or more full-time employees to automatically enroll full-time employees in the company’s lowest-cost health insurance plan after 90 days of employment, unless the employee enrolls in another company plan or opts out of coverage.

Click here to ask Congress to make reasonable changes to the health care law.

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