Beginning in 2014, a large employer may be subject to a penalty if the employer does not provide minimum essential health coverage to its full-time employees.
A large employer is one that for a year employed an average of at least 50 full-time employees (at least 30 hours per week) on business days during the preceding calendar year. In order to make this determination, the employer must not only count all of its full-time employees, it must count the hours worked by its part-time employees for each month and divide this total by 120 in order to determine its "full-time equivalent" employees for the month.
An employer that has "seasonal workers" may be able to use a special rule for avoiding large employer status. It provides that an employer is not considered to employ more than 50 full-time employees if (i) the employer's workforce exceeds 50 full-time employees for no more than 120 days during the calendar year and (ii) the employees in excess of 50 employed during that 120-day period were "seasonal workers." What is a "seasonal worker"? A "seasonal worker" is a worker who performs labor or services on a seasonal basis as defined by the Secretary of Labor. They include workers whose employment pertains to or is of the kind exclusively performed at certain seasons or periods of the year and that may not be continuous or carried on throughout the year. They also include retail workers employed exclusively during holiday seasons. A reasonable, good faith interpretation of who is "seasonal" is all that is required through at least 2014.
Note that the exception is worded in terms of "more than 50" full-time employees," but an employer is a large employer if it employees an average of "at least 50" full-time employees. We would welcome guidance from the government on this difference. For example, if an employer has 30 full-time non-seasonal employees, and 20 full-time seasonal employees for no more than 120 days, is this exception unavailable?
The IRS has provided detailed guidance and safe harbor methods for counting employees. The guidance includes the use of measurement periods for making full-time employee determinations, stability periods for using the results from a measurement period without having to reexamine employees whose hours might have changed, and the treatment of new employees. See IRS Notice 2012-58 for the tax aspects of the health care reform laws.