Remember to Offer Coverage during Open Enrollment

Posted by BAS - 18 November, 2021

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Employers must review their look-back measurement results and offer coverage during Open Enrollment.

Calendar year plans using the look-back measurement method for determining full-time status have to make offers of coverage to variable hour employees who measure full-time during the measurement period. Offering Open Enrollment to only employees who are in a benefits-eligible class may cause the employer to violate the Affordable Care Act.

ACA requires applicable large employers (those with 50 or more full-time/full-time equivalent employees) to 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 basis or an employer can use a look-back period to set full-time status for a future period, generally the plan year. 

Under 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.

Employers should calculate and review their look-back results before open enrollment. It is possible that some employees who are in a benefits-ineligible class actually worked a number of hours for the IRS to consider the employees “full-time” for ACA purposes. In this case, coverage must be offered to the employees for the plan year. Reviewing measurement results will enable the employer to properly offer coverage for the 2022 plan year during the Open Enrollment period.

For assistance with ACA compliance or to discuss collecting hours for determining full-time status, contact ACA-Services@BASusa.com.

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


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