Counting Full-Time Employees for Benefits – Pay or Play

If you employ 100 or more full time employees, the Affordable Care Act requires that they be counted beginning in 2015 to confirm if eligible for health benefits. The “30” hours per week standard that begins next year is delayed until 2016 for employers with 50 to 99 employees. Employers with fewer than 50 full-time employees are not required to count, at least not under current law.

There are generally two types of employees; “hourly” and “salaried.” Actual hours worked is easy for the hourly workers. Days worked or weeks worked is used for salaried workers. And, “30” hours per week is the same as “130” hours of service in a calendar month. Why not “120” hours per month? This has to do with the variation in the number of days per month.

Two choices exist for actual counting. One is called the “Monthly Measurement Method,” resulting in a month-to-month analysis and best for employers with consistency of time worked. The “Look Back Measurement Method” is an option designed for more flexibility in counting. Ongoing versus new, plus variable, seasonal and part time employees must be considered.

Terms like “Initial Measurement Period,” “Standard Measurement Period,” “Stability Period,” “Administrative Period” and “Look Back Period” are included for averaging purposes, and employers have some flexibility in choosing their length. It all comes down to how long an employee is eligible for benefits in the future, even if their work hours are reduced.