Check Look-Back Measurement Results

Posted by BAS - 05 May, 2022


Employers with plans beginning July 1 that use the look-back measurement method for determining full-time status will likely be able to make full-time employee determinations now. Analyzing look back results is important to be able to make proper offers of coverage to full-time employees in the upcoming open enrollment period for the 2022 plan year.

Under the Affordable Care Act, applicable large employers (those with 50 or more full-time/full-time equivalent employees) must offer their full-time employees health coverage or pay a tax penalty. An employer can determine an employee’s full-time status on a monthly period or the employer can use a look-back period to set full-time status for a future period, such as the plan year. 

Using the look-back measurement method, an employer tracks the employee’s hours of service during a specific measurement period. The employer uses the hours calculated during the measurement period and determines an average hours per month over that period. The results of this calculation will determine an employee’s full-time or not-full-time status during a future period, called the “stability period.” Most employers run their stability period consistent with their plan year.

For plans with a 7/1 start date, the measurement period has likely ended. This means that data is set for the employer to calculate full-time/not-full-time status for the upcoming plan year/stability period.

Employers should calculate and review their look-back results before open enrollment. This calculation/review will enable employers to offer health coverage to those employees who have hours to be considered full-time for the upcoming plan year. Failing to offer coverage to an employee who calculated to be full-time during the measurement period can subject the employer to huge tax penalties. It could lead to employers not offering minimum essential coverage to the required 95% of their FTEs and it could result in additional tax penalties if a full-time employee who was not offered coverage receives a tax credit to purchase coverage through the Marketplace. Employers do not want to risk steep tax penalties.

For assistance with ACA compliance or to discuss collecting hours for determining full-time status, contact

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

Recent Posts

Question of the Week

read more

VPN for Secure Employer Network Access

read more

MyEnroll Reports

read more