An issue that was raised at the breakfast, which we did not discuss, is how the PPACA will affect seasonal employers. By way of background, the PPACA requires "applicable large employers" to offer affordable health care coverage to its full-time employees (those that have worked an average of 30 hours of service a week) or pay a penalty. The PPACA defines "applicable large employer" as an employer that has employed at least 50 full time employees during the preceding calendar year. However, an employer is not considered an applicable large employer if (1) the employer's workforce exceeds 50 or more full-time employees for 120 or fewer days and (2) the employees in excess of 50 are seasonal workers.
There are a number of industries that employ "seasonal" workers for more than 120 days in a year that are not currently offering health insurance coverage to some or all of their full-time employees. Although the IRS has issued Notice 2011-36, which requests comments on how to count employees for purposes of coverage and the penalty, the Notice does not address the 120 day limitation. Thus, unless the law is changed, a number of seasonal employers that do not offer health care coverage to its full-time seasonal workers in 2014 could potentially be assessed a penalty. This is another hit to the hospitality industry which has been struggling to stay afloat in this weak economy.