The Affordable Care Act: What you need to know about properly counting dental team members

President Obama has announced a one-year delay to a key component of the Affordable Care Act stating, “Insurers can extend current plans otherwise canceled in 2014.” While waiting for insurance companies to further clarify, there is one, less talked about provision of the ACA to which dentists should be paying attention.

Dentists will be required to comply with the ACA’s provisions requiring employers to count their employees so they can properly report those who are full-time equivalent (FTE) employees.

Why is this important?

The Department of Labor and the Internal Revenue Service have announced that addressing the issue of misclassified employeesis a high priority for their audit and enforcement activities. Now is the time to take a closer look at Employee Classifications and Status. According to a recent advice from Thomas-Wiring-Doll, “The financial stakes for errors in worker classification are high and will only increase once the ACA is fully effective.”

Employee Classifications:

While the Fair Labor Standards Act does not define full-time employee status, but leaves it to the employer to determine, provision §4980H(c)(4) of the Affordable Care Act states that 30 hours per week average is the statutory definition of a full-time employee.

Employee Status:

Exempt from Overtime: Fair Labor Standard Act (FLSA) requirements for “exempt” status are extensive, specific, and stringent and generally apply to executives, managerial, or professional positions. It’s important to note that it is rare for dental employees to meet these strict standards.

Non-Exempt from Overtime: 95% of dental employees. Non-exempt employees can receive their compensation either in the form of salary, a daily rate, or an hourly wage. Do not confuse “salaried” employees with “exempt” employee status. Even a salaried, non-exempt employee must be paid overtime.

Overtime: Pay at least 1 1/2 times the employee's regular rate of pay for all hours worked over 40 in a workweek or over any state-mandated daily threshold. For clarification in your state, feel free to contact me at Ginny@GinnyHegarty.com.

Independent Contractor: the IRS uses a “20-factor test,” to access independent contractor status. If the company exercises too much control, the worker is deemed to be an employee. 95% of all employees do not meet the stringent standard to be classified as independent contractors.

Author Note:

On November 19, 2013, Forbes.com reported, “In the last 2 years alone, the DOL claims to have collected over $18.2 million in back wages for workers who were misclassified. That’s a 97% increase, and states collect their share too. Employers should be looking over their shoulder. With a mix of state and federal taxing, worker’s compensation and unemployment agencies all probing for dollars, one dispute often triggers another.”

Editor's Note: Want to read more information on the effects of the Affordable Care Act on dental practices? Click here to watch editorial director Kevin Henry's interview with insurance expert Teresa Duncan.

Editor's Note: Photo of U.S. Capitol courtesy of keithreifsnyder on Flickr.com.