Measuring Hours for ACA Compliance

Posted by BAS - 14 January, 2021

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At the start of the new year, it is important to remember to measure employee hours for ACA compliance. An applicable large employer (one with 50 or more employees in the prior year) must offer full-time employees affordable health care providing minimum value or pay a tax penalty. There are two ways to count hours to determine if an employee should be considered full-time for ACA purposes. An employee is considered full-time if the employee works 130 or more hours per month.

Under the Monthly Measurement Method, an employer determines each employee’s status as a full-time employee for a calendar month by counting the employee’s actual hours of service for that month. This method is useful for employees whose hours do not fluctuate throughout the year.

Under the Lookback Measurement Method, an employer counts the 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 employees who are variable hour and whose hours of service fluctuate throughout the year. 

Employers should pay attention to hours for purposes of offering employees health coverage in compliance with the ACA.

For information about BAS’ Affordable Care Act data collection and reporting services, contact your account manager or solutions@BASusa.com.

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


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