VIII. Affordability and Affordability Safe Harbors

C. Rate of Pay Safe Harbor

Under the rate of pay safe harbor in the final regulations, an applicable large employer member’s offer of coverage to an hourly employee is treated as affordable for a calendar month if the employee’s required contribution for the calendar month for the lowest cost self-only coverage that provides MV does not exceed 9.5 percent of an amount equal to 130 hours multiplied by the lower of the employee’s hourly rate of pay as of the first day of the coverage period (generally the first day of the plan year) or the employee’s lowest hourly rate of pay during the calendar month download font calibri. Under the same safe harbor, an applicable large employer member’s offer of coverage to a non-hourly employee is treated as affordable for a calendar month if the employee’s required contribution for the calendar month for the lowest cost self-only coverage that provides MV does not exceed 9.5 percent of the employee’s monthly salary, as of the first day of the coverage period (instead of 130 multiplied by the hourly rate of pay); provided that if the monthly salary is reduced, including due to a reduction in work hours, the safe harbor is not available last chaos download deutsch kostenlos.

The rate of pay safe harbor provides employers with a design-based method for satisfying affordability without having to analyze each employee’s wages and hours finding bigfoot kostenlos. Under this safe harbor, for an hourly employee, the employer uses an assumed rate of 130 hours per calendar month multiplied by an hourly employee’s rate of pay, regardless of whether the employee actually works more or less than 130 hours during a calendar month gotomeeting app herunterladen. The affordability calculation under the rate of pay safe harbor is not altered by a leave of absence or reduction in hours worked. Thus, for example, under the rate of pay safe harbor, if an hourly employee treated as a full-time employee earns $10 per hour in a calendar month (and earned at least $10 per hour as of the first day of the coverage period) but has one or more calendar months in which the employee has a significant amount of unpaid leave or otherwise reduced hours, the employer may still require an employee contribution of up to 9.5 percent of $10 multiplied by 130 hours ($123.50) amazon prime video app herunterladen.

The final regulations, unlike the proposed regulations, permit an employer to use the rate of pay safe harbor even if an hourly employee’s hourly rate of pay is reduced during the year open word kostenlos download. The proposed regulations provide that the rate of pay safe harbor cannot be used if the employer reduces an employee’s hourly rate of pay during the year, because otherwise employers could set an artificially high rate of pay at the beginning of the coverage period resulting in an artificially high required employee contribution, and then the employer could reduce the employee’s rate of pay for the remainder of the coverage period libre office powerpoint download kostenlos. One commenter noted that there are instances in which an employer adjusts an employee’s rate of pay depending on, for example, whether minimum sales goals are satisfied freie weihnachtsbilder downloaden. Commenters also noted that the rate of pay may be reduced for bona fide reasons, such as a transfer of position, and requested that the rate of pay safe harbor be available in this circumstance as long as the premium was reduced to reflect the reduction in the rate of pay Download overcooked for free.

In response to these comments, the final regulations permit an employer to apply the rate of pay safe harbor to an hourly employee even if the employee’s rate of pay is reduced during the year herunterladen. In this situation, the rate of pay is applied separately to each calendar month, rather than to the entire year and the employee’s required contribution may be treated as affordable if it is affordable based on the lowest rate of pay for the calendar month multiplied by 130 hours. The final regulations adopt these changes because they result in lower employee required contributions in situations in which an employee’s hourly rate of pay is reduced during the year.

Commenters noted that the rate of pay safe harbor cannot be used, as a practical matter, for tipped employees or for employees who are compensated solely on the basis of commissions. While this is correct, employers can use the two other affordability safe harbors, Form W-2 wages and federal poverty line, for determining affordability for employees whose compensation is not based on a rate of pay.