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It’s “What’s Up? Wednesday”. Time to talk about DETERMINING WHO IS FULL-TIME for the AFFORDABLE CARE ACT . . .

By June 19, 2013July 23rd, 2018Human Resources

You asked:  “Since the “Pay or Play” component of the ACA begins next January, when do we measure whether an employee should be considered full or part-time? How long is the look back period?

Alex answers: If you have determined that you are a large employer by ACA standards (50 full time equivalent employees or more) AND you have decided you would rather “play” than “pay”, then you must establish annual measurement and stability periods for determining which of your employees would be considered full-time, and therefore must be offered health care coverage.


First, you will need to establish a Standard Measurement Period (or “look back period”). This is that window of time, established by the employer, in which you calculate the average weekly hours worked by a given employee. This measurement period can span from three to12 consecutive calendar months. It is up to the employer to decide when the Measurement Period starts and ends, but the decision must be made on a uniform and consistent basis for all employees. However, different measurement periods may be used for different categories of employees (such as collectively bargained vs. non-collectively bargained; salaried vs. hourly; or employees from different entities within the organization). During the Measurement Period, you will examine whether an employee averaged at least 30 hours per week. If so, then he/she has to be treated as a “full-time” employee (i.e. be given the option to enroll in full-time health benefits, if offered) for a period of time called the “Stability Period.”


The Stability Period is a period during which the employee’s status cannot be changed.  It must be no shorter than six months and last at least as long as the Measurement Period. Beginning with the 2015 coverage year, the Stability Period must be equal to the Measurement Period.


The Administration Period is an optional period during which you have time to calculate employees’ hours, answer questions, collect materials and enroll employees in health coverage if they elect it. The Administration Period can be no longer than 90 days and must start immediately following the Measurement Period and right before the Stability Period.


Of course, these periods can start and stop at different times for different employees, depending on when they were hired. If you’d like help determining how many full-time equivalent employees you have or determining which employees must be offered health care coverage, please give us a call. We will be happy to walk you through this complicated process.

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