• FREE RESOURCES
  • PREMIUM CONTENT
        • SEE MORE
          PREMIUM RESOURCES
  • HR DEEP DIVES
        • Coronavirus (COVID-19) Resources for HR Professionals
          Employment Law
          Labor Law Posting Requirements: Everything You Need to Know
          Recruiting
          businesswoman selecting future employees on digital interfaces
          Recruiting Resources for HR & Hiring Managers
          Performance Management
          vector image of young female making star rating
          Performance Review Resources
          Employment Law
          Understanding Equal Employment Opportunity and the EEOC
          Recruiting
          Onboarding Resources for HR & Hiring Managers
  • CORONAVIRUS & HR

  • LOGIN
  • SIGN UP FREE

HR Morning

  • FREE RESOURCES
  • PREMIUM CONTENT
        • SEE MORE
          PREMIUM RESOURCES
  • HR DEEP DIVES
        • Coronavirus (COVID-19) Resources for HR Professionals
          Employment Law
          Labor Law Posting Requirements: Everything You Need to Know
          Recruiting
          businesswoman selecting future employees on digital interfaces
          Recruiting Resources for HR & Hiring Managers
          Performance Management
          vector image of young female making star rating
          Performance Review Resources
          Employment Law
          Understanding Equal Employment Opportunity and the EEOC
          Recruiting
          Onboarding Resources for HR & Hiring Managers
  • CORONAVIRUS & HR
  • Employment Law
  • Benefits
  • Recruiting
  • Talent Management
  • Performance Management
  • HR Technology
  • More
    • Leadership & Strategy
    • Compensation
    • Staff Administration
    • Policy & Procedures
    • Wellness
    • Staff Departure
    • Employee Services
    • Work Location
    • HR Career & Self-Care
    • Health Care
    • Retirement Plans

Major pitfall when calculating full-time employees under Obamacare

obamacare, healthcare reform
Christian Schappel
by Christian Schappel
January 7, 2015
2 minute read
  • SHARE ON

It’s been nearly five years since President Obama put his pen to the Affordable Care Act, and its employer mandate has finally kicked in. But its implementation has brought a new pitfall to light. 
As you know, the mandate says that starting in 2015 the largest employers (those with at least 100 full-time equivalent employees) must offer coverage to their full-time equivalent employees to avoid the law’s penalties.
But what at least some employers will likely fail to realize is this: There’s another group of workers who, under certain circumstances, will have to be offered coverage as well — former full-time equivalent employees.
Those familiar with Obamacare’s formula for calculating full-time employees know there is a “measurement period” during which employers need to track the hours worked by variable-hour employees to see if they average at least 30 hours per week (the threshold to be considered full-time) during that period.
The measurement period must be at least three months long.
Following the measurement period, employees enter a “stability period,” which must be at least as long as the measurement period or six months, whichever is greater. During the stability period the employee’s status, as “full-time” or “part-time” is locked in.

Where employers will get into trouble

Here’s a common scenario under which these rules will likely trip up some employers to begin the new year, as eluded to by employment law attorney Keith R. McMurdy of the firm Fox Rothschild.
Say you’ve got an employee whose hours drop below 30 per week at the start of 2015. Some employers may think that person’s no longer a full-time equivalent employee under Obamacare and elect not to offer the person employer-sponsored health insurance.
But that would be costly mistake if the employee’s measurement period came to a close at or near the end of 2014 — and the employee was averaging at least 30 hours per week during that measurement period.
Under that scenario, the employee would have to be offered insurance for his or her employer to avoid Obamacare’s steep non-compliance penalties.
The person may lose benefits eligibility later in 2015. But he or she must be considered a full-time equivalent employee for at least six months after the measurement period and no shorter than the measurement period.

Get the latest from HRMorning in your inbox PLUS immediately access 10 FREE HR guides.

I WANT MY FREE GUIDES

Keep Up To Date with the Latest HR News

With HRMorning arriving in your inbox, you will never miss critical stories on labor laws, benefits, retention and onboarding strategies.

Sign up for a free HRMorning membership and get our newsletter!
  • This field is for validation purposes and should be left unchanged.
HR Morning Logo
  • Facebook
  • Twitter
  • Linked In
  • ABOUT HRMORNING
  • ADVERTISE WITH US
  • WRITE FOR US
  • CONTACT
  • Employment Law
  • Benefits
  • Recruiting
  • Talent Management
  • HR Technology
  • Performance Management
  • Leadership & Strategy
  • Compensation & Payroll
  • Policy & Culture
  • Staff Administration
  • Wellness & Safety
  • Staff Departure
  • Employee Services
  • Work Location
  • HR Career & Self-Care

HRMorning, part of the SuccessFuel Network, provides the latest HR and employment law news for HR professionals in the trenches of small-to-medium-sized businesses. Rather than simply regurgitating the day’s headlines, HRMorning delivers actionable insights, helping HR execs understand what HR trends mean to their business.

Privacy Policy Terms of Service
Copyright © 2021 SuccessFuel

WELCOME BACK!

Enter your username and password below to log in

Forget Your Username or Password?

Reset Password

Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.

Log In

During your free trial, you can cancel at any time with a single click on your “Account” page.  It’s that easy.

Why do we need your credit card for a free trial?

We ask for your credit card to allow your subscription to continue should you decide to keep your membership beyond the free trial period.  This prevents any interruption of content access.

Your card will not be charged at any point during your 21 day free trial
and you may cancel at any time during your free trial.

preloader