By - May 3, 2016

Seasonal Employees and the ACA: Determining Benefits Eligibility

Seasonal employees

Benefits administration for a company of any size can be a very cumbersome and complex process – and that’s just for a company of full-time employees. If an organization employs seasonal employees, it can often significantly increase the complexity of determining if seasonal employees are eligible for the benefits of full-time employees under the ACA; in particular, many companies may find themselves wondering if their seasonal employees are eligible for participation in affordable group healthcare plans.

Determining eligibility for seasonal employees with the ACA

By and large, most of the laws concerning healthcare for seasonal employees and the ACA only apply to employers considered “large” under the rules of the IRS. As outlined by the Society for Human Resource Management, a company that employs 50 or more people is considered a “large” employer. In IRS language, these kinds of companies are also referred to as “Applicable Large Employers (ALEs)”.

Under the stipulations of the Affordable Care Act, all full-time employees of a company that employs more than 50 people must be offered a healthcare plan (thus, both ALEs and smaller companies are equally responsible for offering healthcare to their employees). “Full-time” employees, as defined by the ACA, are employees whose total work hours equate to 30 or more hours per week. However, the law provides for a distinction between full-time “regular” employees and full-time “seasonal” employees.

The key criteria for determining an employee’s “seasonal” status with the ACA lies in reviewing how long they are expected to work in their position. In this instance, seasonal employees are considered individuals who are not expected to work at their position longer than period of six months. However, a “seasonal” status is still applied to these employees even if their period of employment lasts longer than the expected six months, as one might see with an employee who works at a ski resort but works longer than six months due to an unusually lengthy winter and ski season.

If you expect employees to be employed no more than six months, then it is likely that you will not have to worry about offering them a healthcare plan. However; in the event that their employment lasts longer than a period of 8 months, these employees will become eligible for healthcare under the standard stipulations of the ACA – i.e. they can receive healthcare benefits if they are “full-time” employees under the law.

It is essential to remember that seasonal employees, with the ACA, will be considered as “regular employees” if they are employed for a period of eight months or longer. To this point, there is a key consideration to keep in mind when determining eligibility for seasonal employees – namely, that their aggregate amount of hours worked will be the ultimate determining factor for their eligibility, as opposed to evaluating the number of hours they worked from week to week over the course of their employment. For instance, if an employee works 180 hours during a four-week month, they would be eligible for a healthcare plan, since their average number of hours per week is higher than 30; this would remain true even if they worked fewer than 30 hours on a particular week.

Contact us for assistance with ACA compliance

If your company is struggling with handling healthcare benefits for seasonal employees, we are here to help. Learn  about our comprehensive ACA Compliance & Reporting Solution or if you have any questions, Contact Us

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