ACA Compliance: How to Track Variable Hour Employees

Variable hour employees are those who, based on circumstances surrounding their employment, cannot easily be classified as a standard, 30-hour-per-week full-time employee. In other words, their schedules fluctuate so greatly, it requires a longer measurement period to determine whether they’re eligible for health coverage and benefits extended to other full-time employees.

But just because they’re variable hour employees doesn’t mean they can be swept under the rug. If any of these employees does work, on average, over 30 hours per week and you don’t make an offer of coverage to them, you could face a $100 per day penalty for each affected employee.

Employers are given a full year, or “measurement period,” under the ACA to determine whether or not their variable hour employees average 30+ hours of work each week. If an employee is discovered to have exceeded 30 hours/week, you must make an appropriate offer of coverage. It must go into effect within 90 days of acceptance and be available for a full 12 months, even if the employee’s hours worked drop below 30 hours/week. This time period that the employee is covered is called the “stabilization period.”

Unlike your regular full-time employees, variable hour employees must qualify for their offers of coverage each year by working that average of 30 hours a week. That’s why it’s recommended employers set their measurement period to start 90 days before the annual renewal date. So the measurement period for companies with a January 1 renewal date will measure their employees’ variable hours from October 1 to September 30 of the year before. This also makes it easier for handing out your offers of coverage, since you’ll only have one open enrollment period.

Already have your employees tracked and ready to file? Great! You can start with ExpressIRSForms today! And if you have any questions, don’t hesitate to call our customer support center in Rock Hill, South Carolina. We’re available Monday through Friday, 9:00 a.m. to 6:00 p.m. EDT, at (704) 684-4751 and 24/7 at support@ExpressIRSForms.com.



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