Employers with July 1 plan years are likely preparing for open enrollment. Large employers for Affordable Care Act purposes (those with 50 or more employees) should make certain to offer health coverage to full-time employees. For an employer that uses the lookback method to calculate full-time status, this will require analyzing the measurement period results to determine if an employee worked an average of 130 hours per month to be considered full-time for an upcoming stability period.
Employers have two options for counting their employees’ hours for determining eligibility for health coverage. Employees who work 30 or more hours per week (130 or more hours for month) are considered full-time equivalent employees and must be offered affordable health coverage that meets minimum value.
- 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 employee 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.
Many employers using the lookback measurement method tie their stability period to their plan year, which would require action by employers with 7/1 plan years.
