Confirm Coverage for Full-Time Employees

Posted by BAS - 01 July, 2021


Employers with health plan years starting 7/1/2021 must make sure they are offering coverage to all full-time employees.

Determining which members of your workforce are full-time is an important first step for ACA compliance. Applicable large employers must offer affordable health coverage to their full-time employees or pay a tax penalty.

An employer uses one of two methods for counting hours to calculate full-time status.

  1. Under the Monthly Measurement Method, an employer counts each employee’s actual hours of service for each month of the year. This method is useful for employees whose hours do not usually fluctuate.
  2. Under the Lookback Measurement Method, an employer counts each employee’s hours of service in one period (the measurement period) to determine the employee’s full-time status for a future period (the stability period). This method is useful for employers who have employees with hours that fluctuate throughout the year. 

An hour of service is each hour an employee is paid or entitled to payment. For hourly employees, hours are counted by records of actual hours worked. For non-hourly employees, hours may be calculated using one of the following options:

  • Using actual hours worked for which the employee is entitled to payment;
  • Using a days-worked equivalent where each day is equal to 8 hours of service; or
  • Using a weeks-worked equivalent where each week is equal to 40 hours of service. 

An employer may apply different measurement methods for different reasonable classifications of employees. All employers must review hours worked in either a monthly period or look-back period to understand the employees to whom benefits must be offered.

If you are starting a new plan year and use the lookback measurement method, you should make sure that anyone who has calculated to be a full-time employee is offered coverage for the upcoming stability period (usually the plan year). Reviewing offers of coverage at the beginning of the plan year can help save problems down the road.

For information about BAS’ Affordable Care Act data collection and reporting service, contact your account manager or

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

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