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Member, Beacon International Group, Ltd.
WASHINGTON—The U.S. Treasury Department unveiled potential approaches Tuesday to what constitutes a full-time employee as it pertains to the health care reform law requirement that employers offer full-time employees coverage or pay a penalty if they do not.
Under the Patient Protection and Affordable Care Act and starting in 2014, employers with at least 50 full-time employees—defined as employees who work an average of at least 30 hours per week—must offer coverage or pay an annual assessment of $2,000 for each full-time employee not offered.
In Tuesday’s announcement, the Treasury Department said it is asking for public comment on determining whether an employee meets the 30-hour threshold.
Under one approach suggested by Treasury in Notice 2011-36, an employer would calculate each employee’s full-time status by looking back “at a defined period of not less than three but not more than 12 consecutive calendar months” to determine if the employee worked an average of 30 hours per work during this “measurement” period.
If the employee met the 30-hour standard by that measurement, the individual would be considered a full-time employee during a subsequent “stability” period, regardless of the number of hours the employee worked during that subsequent period.
For an employee determined to be a full-time employee during the measurement period, the stability period would be at least six consecutive months after the measurement period.
If an employee were determined not to be full-time during the measurement period, the employer would be allowed to exclude the individual in calculating its full-time employees during a stability period, Treasury suggested.
Comments are due June 17 and can be emailed to Notice.comments@irscounsel.treas.gov.. Notice 2011-36 should be included in the subject line.