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As the summer approaches and colleges wind down, some employers may be contemplating hiring summer interns. Hiring summer help may bring with it Affordable Care Act compliance considerations.
The Affordable Care Act requires Applicable Large Employers (those with 50 or more full-time employees in the prior year) to offer affordable health coverage providing minimum value to 95% of their full-time employees or face a tax penalty. A full-time employee for ACA purposes is an employee who averages working 30 hours per week (130 hours per month). Penalties for not complying with ACA requirements are large.
An intern is generally considered an employee since the intern is supervised by the employer. If the intern is being hired for the summer, only, without expectation that the individual will work after the summer ends, the employer may not be required to offer health coverage to the employee under the “seasonal employee” exception.
A seasonal employee under the Affordable Care Act is an employee who is hired into a position for which the customary annual employment is six months or less. This assumes that by the nature of the position, employment begins and ends approximately the same time each calendar year.
For large employers who use the look-back method to determine full-time status, a seasonal employee intern is initially treated as a variable hour employee. The employee does not have to be offered health coverage, but the employee’s hours are counted starting on date of hire.
If the seasonal employee is terminated from employment within a 6-month period, no coverage would have had to be offered. If the seasonal employee intern remains employed past the summer, the individual’s hours from date of hire are considered in determining if the employee ends up working more than 130 hours per month to be considered a full-time employee in the next stability period.
BAS’ Affordable Care Act data collection and reporting tool can help employers with hours counting and required ACA filings. For more information about BAS’ ACA services, contact your account manager or solutions@BASusa.com.
