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When assessing whether a company is subject to the ESR provision, employers need to determine how many full-time employees and full-time equivalent (FTE) employees they have.

Full-time employees are determined as those working an average of at least 30 hours per week or 130 per month. FTE employees are determined by taking hours of service from all non-full-time employees in a given month (capped at 120 hours per employee) and dividing the total by 120. This number is added to the total number of full-time employees and considered as part of the count to determine if a company is subject to the ESR provision.

Applicable employers have to provide health coverage for full-time employees and their dependents, including FTE employees. Employers do not have to offer health coverage for any employees determined to be part-time and have the option of instituting a 90-day administrative waiting period for coverage for newly-hired qualified employees.

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