An employer that uses the lookback method for determining full-time status for ACA must offer medical coverage to new hires who are calculated to be full-time (working 130+ hours per month) during their initial new hire measurement period. Paying attention to a new hire measurement period is important for an employer’s newly hired variable and part-time employees.
Employees who are newly hired into a full-time position should be offered health coverage soon after hire. Employees who are newly hired into a part-time, variable hour position have their own “initial” new hire measurement period that may be considered before health coverage needs to be offered. Hours worked during the initial new hire measurement period are averaged to determine if the employee should be considered “full-time” for ACA and must be offered benefits at the end of the initial new hire measurement period.
An initial new hire measurement period for an employee starts on the date of hire and is measured for a designated period of time after the date of hire. Employers are permitted to determine whether the new employee is a full-time employee using an initial measurement period of between three and 12 months (as selected by the employer).
If during an employee’s own personal new hire measurement period the employee averages working 130 or more hours per month, they are considered full-time and must be offered medical coverage for the stability period that immediately follows the end of the new hire measurement period. Eventually when the new hire and regular measurement periods overlap, new hires are folded into the ongoing lookback calculations and the new hire special timing goes away.
Employers should review initial new hire measurement calculations on an ongoing basis to properly offer newly hired variable hour employees when required. Employers that use BAS for ACA data collection and reporting services can review the New Hire Measurement Results Program in MyEnroll360 to track when coverage should be offered to newly hired individuals.
