Summer InternshipsIn an ACA World
It’s the end of the summer and Billy the intern heads back for his fall semester at college after a valuable internship experience that helped both his future and your company. Almost a year later, your company receives a letter from the IRS with a startling fine for failing to offer Billy health benefits. For most, this scenario seems absurd-but it’s a real issue if the process is not handled correctly.
For companies subject to penalties under the Affordable Care Act (ACA), typically companies with 50 or more full-time equivalent employees, the management of interns is not as straightforward as it used to be. In the era of ACA, interns not tracked closely can create a liability for employers-particularly in the area of health benefits eligibility. Here’s what you need to know: If your company is subject to the ACA employer mandates and your company is offering a paid, full-time (30 hours/week or more) internship to someone working beyond your waiting period, that intern would at that point be eligible for benefits like that of a normal employee. With that said, there are three safe harbor exceptions to be aware of, in which you can place these interns: variable-hour employees (if they really have variable hours), seasonal employees, and the requirement to not cover up to 5% of employees. If an intern falls into one of the first two categories, you can place them in a measurement period in which case they need to satisfy the period before being eligible. However, if the intern does not fit into either of those categories, the employer is still allowed to not cover up to 5% of the otherwise eligible employee population, and the intern could possibly be included in that safe harbor. (If the intern fits into the 5% exception, there would be no penalty to the employer if the intern was able to purchase individual health coverage at the governmental Marketplace and received a tax subsidy.) Interns who meet the criteria and work past the waiting period, whether offered coverage or not, are to be reported on the new Form 1095‑C sent to the IRS. On this issue of internships and ACA penalties, the Society for Human Resource Management (SHRM) recommends that if you intend to define interns as seasonal employees, to state that in the offer letter. Further, it recommends to monitor the work and hours of interns closely and remember that they should not be considered a long-term substitute for hiring regular employees. If you have any questions on this topic, please contact Stephen McNeil for more information — [email protected]. |
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All in the FamilyPeople Section |
| The company is family based, with children from both partners’ sides working at the company together. Keith McNeil says that the younger generation brings fresh ideas, different perspectives and a better understanding of technology issues…Stephen McNeil, the son of Keith McNeil, echoes the sentiment, saying, “We don’t have the normal issues a family business has. It’s brought us closer as a family. Both families interact really well.”Read entire article here… |
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