Ways to qualify
- Does the state (or states) where the employer operates have state-qualified requirements?
- Does the company qualify as an employer size that's required to offer health care plans?
- Does the type of worker qualify as headcount toward employer size?
- Does the type of employee qualify for benefits?
Employees normally fall into one of three types when determining qualification for benefits:
- Those that are reasonably expected to work full-time - they automatically qualify
- Seasonal employees - do not qualify for benefits, but are used when calculating employer size (so you do have to track their hours)
- Individuals who's hours vary - might be liable, depending on if they meet the criteria for a full-time employee
How the PPACA defines a full-time employee
A full-time employee is someone who worked an average of 30 or more hours per week, or 130 hours per month in the measurement period. The "measurement" period is a 3-12 month (company selected) period of time that is used to determine whether an employee qualifies for benefits.
So, if you average out the number of hours worked for the employee during this time period and it is over 30 hours, the employee would qualify for benefits.
Stability period and newly-qualified employees
If an employee who's hours vary qualifies for benefits, they are eligible in the following "stability" period. This period of time cannot be shorter than 6 months long, and is typically the same amount of time as the "measurement" period.
Also, if an employer so wishes, they can utilize an "administrative" period of a maximum of 90 days to execute any administrative tasks pertaining to getting the newly qualified employee enrolled in the health care plan.
This cycle of measurement, administrative, and stability periods is a continuous cycle throughout the entirety of the employees time of employment with your company. Most companies will choose to do a 12 month look back period with a 12 month stability period so they only have to go through this process as few times as possible.
Measurement periods and employee types
A company may have multiple "measurement" periods for different types of employees, such as:
- Union vs. non-union
- One for each union
- Hourly vs. salary employees
- One for each state the employees are located in
It is very important that all employees of the same type (hourly, state, or however you have it broken down) must be treated the same. If an employer has multiple businesses, each can have a unique measurement period.
So what's next?
Need help with health benefits administration, we may be able to help. OnPay is a licensed insurance broker in the US.
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