Page 45 - Summer 2014

MONTHS (2015) The longest period a seasonal employer (2016) can designate for a “measurement period” to determine a seasonal employee’s part- Penalties to be paid by individuals who or full-time employment status. Almost fail to carry health insurance in 2015 and every ski area has, or will, designate a 2016 under the Affordable Care Act. In 12-month measurement period for its fact, the penalties could be even higher: In seasonal employees. 2015, the penalty is $325, or 2 percent of household (not personal) income, which- ever amount is greater (and up to 2.5 per- HOURS cent of household income in 2016). Number of hours a seasonal or part-time employee would need to work over a Number of individuals who will pay a pen- 12-month “measurement period” in alty to the IRS for failure to carry health order to be deemed a full-time employee, insurance under the “individual mandate” and thus eligible for health insurance of the ACA, according to a Congressional coverage from a large employer. Budget Office estimate. WEEKS /MONTH Approximate monthly cost for a typical The maximum time a seasonal “gap” coverage insurance plan to cover employee can have a “break in deductibles and out of pocket expenses. A service” (i.e., not work) before gap plan is a compelling, low-cost option an employer can institute a new available to ski areas to incentivize return- 12-month measurement period ing seasonal employees who may not oth- for purposes of defining that an erwise be eligible for full health insurance employee as a “part-time” worker. coverage. treat those seasonal employees who employees who have not worked for be terminated and re-hired after 13 return, year after year. the employer in the past 13 weeks. weeks, or if the person is simply not In other words, after a 13-week scheduled and performs no work break in service, a returning employee during this 13-week break in service). is deemed a “new” employee for pur- These new regulations are criti- In addition to the 12-month mea- poses of re-utilizing a fresh 12-month cally important for seasonal employ- surement period, another critical measurement period. Simply put, if ers. Initial guidance from the IRS time period ski areas should mem- a seasonal employee has a 13-week stated that there must be a 26-week orize is 13 weeks. This number break in service where the individ- break in service before a new refers to the length of a “break in ual is not scheduled at all, after that 12-month measurement period can service” or employment before a sea- 13-week period, the employer can be used in conjunction with a return- sonal employee can be considered a impose an entirely new measurement ing seasonal worker. However, the “new”—albeit returning—employee. period of up to 12 months to deter- IRS recently reduced this break in Under recent IRS guidance, mine if, over that period, the return- service period from 26 weeks to 13 employers are allowed to imple- ing employee averaged more than weeks, giving ski areas even more ment a new 12-month measure- 30 hours of work per week. (It is still flexibility in scheduling their seasonal ment period for those returning unclear if the seasonal employee must workforce. For the ski industry, this SUMMER 2014 | NSAA Journal | 43 w w w.nsaa. org NSAA Summer 2014 prepressed v6a.indd 43 7/3/14 4:21 PM