Who Is a Full-Time Employee Under the Affordable Care Act?

Beginning January 1, 2015, the large employer mandate of the Affordable Care Act (ACA) requires that all full-time employees be offered minimum essential, affordable coverage.  Penalties will be assessed for each month that a large employer fails to offer minimum affordable coverage to its full-time employees.

Under the ACA, a full-time employee has at least an average of 30 hours of service per week, or at least 130 hours of service per month.  Hourly employees can be tracked on an actual hours basis. Other rules apply to salaried and other non-hourly employees. Full-time status is determined each month.

In order to reduce the administrative burden of tracking monthly employee hours, the IRS has issuance alternative guidance for determining full-time employee status.  Under these safe harbor rules, a large employer can choose a “measurement period” of between 3 to 12 months during which it determines which employees meet the hours of service threshold for full-time status.  The employer than establishes a follow-on “stability period” that is at least six months long and no shorter than the measurement period. For those employees who are determined to be full-time during the measurement period, the employer must treat them as full-time employees during the entire stability period, even if they cease to qualify as a full-time employee during the stability period.  For those employees who are not determined to be full-time during the measurement period, the follow-on stability period can be no longer than the measurement period.  Other rules apply for new and variable hour employees.

Needless to say, the alternative safe harbor options have their own administrative challenges. However, they may be easier to address than the month by month calculations that might otherwise be required.  If so, large employers must start planning well in advance of the January 1, 2015 implementation date for the new coverage mandates.  Waiting until the proverbial last minute may eliminate these safe harbor options.

Does Healthcare Reform Have A Future?

I suppose it is a mark of the times that health care reform has long ceased to be a public policy debate about the state of health care in America.  Instead, it marks the latest dividing line between opposing visions of what America is and what it ought to be.  To those opposed, Obamacare represents an existential threat to the continued existence of the prototypical self-reliance individualism that defines the “true” American.  To those convinced that “social justice” demands that our society provide what can be the most basic of human needs, the Affordable Care Act, passed by the legerdemain of an ascendant Democratic Party, remains a fundamental step toward erasing inequality of every kind in America.  Both sides have a point.  The United States has indeed been populated by those who saw opportunity in many forms and sacrificed to take advantage of it to benefit themselves and their families.  On the other hand, Pilgrim settlers in New England sought religious refuge to create their own “City on a Hill” and America has never lacked for utopian ideas and those who believe in them.  Oddly, both points of view are quintessentially American. We want to reward hard work and risk taking and at the same time we recognize a civic to help others.

What is lost in this debate, however, is a more immediate concern. How do we solve the problems facing health care in America.  While it is indeed imperfect, the Affordable Care Act has sown seeds for improvement in what was a deeply flawed, was increasingly dysfunctional, expensive, and unworkable health care system.  We cannot simply revert to the world as it existed prior to the enactment of health care reform in 2010, and this point has so far escaped the notice of many caught up in today’s mindless political debate.

So, does health care reform have a future?  The answer:  Yes, but it is a hugely complex problem and it will be expensive, it will not be the most logical outcome, and it will only happen when those who elect our politicians tell them that something must be done to make it better.  The road will not be straight.