Since I love to keep things simple, the following is the short version of a complex answer.
How does an Employer determine which variable hour employees are considered full time working an average of 30 hours per week and therefore eligible for medical insurance?
- Employees are considered “variable” employee’s if it is unclear whether the employee is expected to work an average of 30 hours per week for the measurement period (as discussed below).
- In 2015: Employers with 100+ FTE (full time equivalent) employees will be required to provide up to 70% of their full time employees with affordable health care coverage that meets minimum requirements, or pay a penalty.
How do you know who qualifies? I’m glad you asked. This is the fun part:
You may use the “Safe Harbor” method: This is guidance that discusses a voluntary “safe harbor” method for determining whether these employees should be classified as full or part time and when health insurance coverage for those deemed full time must begin to avoid the penalty.
- Variable and seasonal workers start out in an initial “measurement period” during which the hours they actually work are recorded (Standard measurement periods range from 3-12 months; employer’s choice).
- Then there is an “administrative period” where the employer determines if the employee worked full or part time during the “measurement period” and enrolls the employee into the health plan if he or she is deemed eligible.
- Finally, there is the “stability period” during which the employee is considered and treated as full time or part time, as determined during the “measurement period”, even if their hours worked during the “stability period” change. The stability period is at least 6 months long however, no shorter than the measurement period which can be up to 12 months.
Hours during the “stability period” are averaged into the next measurement period which means the variable employee must re-qualify as full time based on the prior year’s hours worked.
We too hope for simpler regulations but for now, this is ours to keep.