A Break in the Service Rules for ACA

Posted by BAS - 22 July, 2021


Employers who terminate employees and later re-hire them must be sure to consider the break in service rules under the Affordable Care Act if they calculate hours using the lookback measurement method. An employee may be considered a full-time employee and eligible for health coverage upon hire if the employee’s break in service meets certain criteria.

  1. Break of 13 or more weeks. If an employee resumes employment after a period of at least 13 weeks during which time the employee did not perform an hour of service, the employer can treat the employee as a new hire. As a new hire, the hours worked in the prior measurement period do not have to be considered. If the person is hired into a part-time position working less than 30 hours per week (less than 130 hours per month), the employee does not have to be offered benefits upon re-hire after a 13-week break in service. The employee’s hours will have to be tracked as a new hire in an initial measurement period.
    • If the break in service is less than 13 weeks and if the returning employee had full-time status before the break, the employee must be treated as a continuing employee when the employee resumes employment and must be offered coverage right when the individual is reemployed.
    • If the break in service is less than 13 weeks and if the returning employee had full-time status before the break but waived coverage when it was initially offered, no new offer of coverage has to be given upon rehire. 
  2. Rule of parity. If the employer wants to use a break period shorter than 13 weeks, the re-hire can be treated as a new employee if the period (measured in weeks) during which no services were performed is at least 4 weeks long (and not longer than 13 weeks) and is greater than the number of weeks of employment immediately before the break in service.

Employers should review hours when offering or not offering coverage to rehired employees.

To learn more about BAS’ ACA Data Collection & Reporting module, please contact your account manager or email Solutions@BASusa.com.

Topics: Health Care Reform (ACA), Affordable Care Act, MyEnroll360 News, HR & Benefits News

Recent Posts

Question of the Week

read more

VPN for Secure Employer Network Access

read more

MyEnroll Reports

read more