Page 44 - Summer 2014

Until recently, it was unclear Even as large employers, ski areas The IRS recently announced guidance whether and how employers were can significantly minimize the impact on how volunteers would be treated to “count” the hours of service pro- of the employer mandate. Even if a under the ACA. At issue is whether vided by volunteers for purposes of ski area’s volunteers push an area into volunteers’ service is to be counted determining the number of FTEs. the large employer category under the for purposes of determining whether However, the IRS recently clarified ACA—and, in turn, the area is man- a business would qualify as a “large that those for-profit companies using dated to offer full-time employees employer,” and thus subject to the volunteers must include the hours of health insurance—seasonal employees employer mandate to offer full-time service from those volunteers for pur- will not be deemed “full time” under employees comprehensive health insur- poses of calculating the FTE hours the ACA by utilizing the IRS’ concept ance. Given the number of volunteers aggregated for determining large of look-back periods, more commonly serving as ski patrollers and moun- employer status. known as “measurement periods.” tain hosts, this new guidance is espe- Thus, smaller ski areas that may Simply put, an employer may cially important for those smaller ski be on the cusp of large employer implement a measurement period of areas on the cusp of being designated a status will need to tabulate the hours up to 12 months to determine if a “large” employer. of service provided by volunteers— newly hired seasonal, variable-hour A quick overview here will be including patrollers, ambassadors, and employee will achieve full-time status helpful. It is well established that a mountain hosts—in calculating the (averaging more than 30 hours or more company is deemed a large employer total hours affecting their FTE calcu- per week). For seasonal employees, it under the ACA if it has more than 50 lation. By adding in the hours of ser- is often unclear how many hours they full-time employees, defined as those vice from volunteer patrollers, though, will work during the course of a year, who work on average 30 hours or many smaller ski areas are likely to so the IRS allows these measurement more per week (or, more than 1,560 be designated a large employer under periods to determine whether a sea- hours in a year). In addition to count- the ACA. (Again, if the ski area is a sonal employee will eventually achieve ing full-time employees, employers medium-size employer with 50 to 99 full-time status. Even if a seasonal must also aggregate all of the hours full-time employees, including FTEs, employee works just five or six months of part-time employees to determine the employer mandate does not kick in during this 12-month period, typical how many part-timers would amount until January 1, 2016.) for most seasonal ski area employees, to full-time status. For example, 40 However, volunteers serving a gov- an employer can determine if, in that employees working part-time hours ernment entity or a tax-exempt orga- span, the employee averaged more than may amount to the equivalent of 15 nization are not counted toward large 30 hours per week. (For a more in- full-time employees. This accounting employer status, according to the IRS. depth analysis of measurement peri- of part-time employees under the ACA This would mean that a ski area owned ods, see “Game Change: New Health is referred to as “full time equivalents,” by a municipal or county government Care Regulations Benefit Resorts and or FTEs. would not count the hours of service Employees,” from the Winter 2012 NSAA estimates that based on of volunteers as part of its FTE calcu- issue of the NSAA Journal). employee data provided by ski areas, lation. Similarly, for the small number In other words, a 12-month mea- the overwhelming number of areas of ski areas that are structured as tax- surement period is, effectively, a sea- would likely be deemed large employ- exempt 501(c)(3) organizations, volun- sonal-worker exemption from the ers under the ACA, and thus required teer patrollers would not be calculated ACA’s employer mandate. Seasonal to offer full-time, year-round employ- as FTEs for purposes of determining employees are thus eligible for gener- ees and their dependents health insur- large employer status. ous government subsidies through the ance, or pay a penalty. However, Furthermore, even if volunteers exchanges (online private marketplaces NSAA believes that less than 10 per- put a ski area into the large employer created under the ACA) to obtain cent of ski areas in the United States category, very few volunteers would be health insurance. These measurement would fall below this large employer eligible for employer-provided health periods are hugely important for sea- threshold, and, in turn, have no obli- insurance, because volunteers typically sonal employers, especially since the gation to provide health insurance do not work full-time hours (30 hours IRS recently provided new guidance under the ACA. per week or more). this spring about how employers can 42 | NSAA Journal | SUMMER 2014 w w w. n s a a . o rg NSAA Summer 2014 prepressed v7a.indd 42 7/9/14 1:32 PM