Employee counts are used to determine what laws, rules, fees and penalties apply to a health plan and/or the employer sponsor. The methods for counting employees are as varied as the laws that affect them. Counting employees can leave you feeling cross-eyed. With the help of American Benefits magazine, we’ve put together a guide for how to count employees based on employer size.

Counting Method 1: Employers with at least 15 employees

  • Title VII of the Civil Rights Act, as Amended by the Pregnancy Discrimination Act
  • Americans with Disabilities Act

Who to Count: Employees working 20 or more calendar weeks in the current or preceding calendar year.

How to Count: Count each fill-time and part-time employee as 1.

Counting Method 2: Employers with at least 20 employees

  • Genetic Information Nondisclosure Act
  • Age Discrimination in Employment Act

Who to Count: Employees working 20 or more calendar weeks in the current of preceding calendar year.

How to Count: Count each full-time and part-time employee as 1.

Counting Method 3: Employers with at least 20 employees

COBRA

Who to Count: Employees (in all commonly-owned businesses) on more than 50 percent of the typical business days in the previous calendar year.

How to Count: Count each full-time employee as 1. Count each part-time employee as a fraction, with the numerator equal to the number of hours worked by that employee and the denominator equal to the number of hours that must be worked on a typical business day in order to be covered full-time.

Counting Method 4: Employers with at least 20 or more employees

Medicare Secondary Payer (MSP) Rules Based on Age:

A Group health plan is the primary payer and Medicare is the secondary payer for individuals age 65 or over if their group health coverage is by virtue of the individual’s (or his/her spouse’s) current employment status.

Who to Count: Employees on each working day in at least 20 weeks in either the current or the preceding calendar year. The 20-employee test must be run at the time the individual receives the services for which Medicare benefits are claimed.

How to Count: Count each full-time and part-time employee as 1.

Counting Method 5: Employers with at least 50 employees

The Family and Medical Act (FMLA): FMLA requires employers that sponsor group health plans to provide group health plans benefits to employees on an FMLA leave. Please note that public agencies and public and private schools are covered regardless of the number of employees.

Who to Count: Employees working 20 or more weeks in the current of preceding calendar year within a 75 mile radius of the applicable work location.

How to Count: Count each full-time and part-time employee as 1.

Counting Method 6: Applicable Large Employers (ALE)

The Shared Responsibility Provision of ACA:

ALE’s must offer minimum essential coverage that is “affordable” and that provides “minimum value” to their full-time employee, must report to the IRS information about the healthcare coverage. If any, they offered to full-time employees, and must provide a statement to employees.

Who to Count: Full-time employees and full-time equivalent (FTE) employees in each month of the preceding year. Divide this number by 12, and if the result is 50 or greater, the employer is an ALE for the current year.

How to Count: Count full-time (30 or more hours per week determined on a monthly basis) and FTE employees as 1. Aggregate part-time hours and divide by 120 to determine FTE’s.

As always, if you have any questions or need assistance, please contact JorgensenHR at (661) 600-2070, email info@jorgensenhr.com or visit www.joregensenhr.com. Our mission is to provide the Best HR solutions for your business.