Applicable Large Employers (those with 50 or more full-time employees in the prior year) must offer health coverage to their full-time employees. Large employers who do not offer health coverage to at least 95% of their full-time employees may be subject to very large tax penalties if one of those employees receives a premium credit to purchase coverage through the Marketplace.
An employer that uses the lookback measurement method to determine full-time status must treat anyone who works at least an average of 130 hours per month during the measurement period as full-time for the next stability period. This applies even if the employee is not in a “full-time” or “benefits-eligible” class.
Employers with a fiscal year plan should review measurement period calculations before open enrollment. This review is particularly important for variable hour and part-time employees. Even though an employer might not think these employees need to be offered health coverage, some of these employees may have calculated to be full-time (working 130+ hours per month) which means they must be offered health coverage or the employer may be subject to penalties.
Employer’s Role in Tracking Hours and Offering Medical Coverage
The administrative period is the time that employers should review the hours calculations for variable hour and part-time employees to determine if they need to be offered medical coverage during open enrollment for the start of the new plan year.
If you use BAS for your ACA hours calculations, the “Standard Measurement Results” Program under the Compliance menu in MyEnroll360 will provide an overview of all employees who are calculated to be full-time, based on the hours entered for them during the measurement period. Any employee who averages 130 or more hours per month at the end of the measurement period is considered full-time. These employees should be offered medical benefits for the upcoming plan year since they will be identified as full-time for ACA reporting purposes. If they are not offered medical coverage, your organization may be subject to tax penalties.
If you have questions about the full-time employee calculations or how to review your measurement period results, please contact ACA-Services@BASUSA.com.
