Part-Time Employee Issues

HR Policy Association strongly supports the Department of Treasury’s regulatory approach in defining who is a “full-time employee” under the health care reform law. Under PPACA, employers are required to provide coverage to their full-time employees that is both “affordable” and meets “minimum value” or face penalties for full-time employees that receive premium assistance through the health insurance exchanges. Therefore, the definition of a "full-time employee" is critical in determining if and to what extent an employer may incur a penalty.

The Association had been concerned that the administration would calculate hours of service on a monthly basis which would have created significant administrative burdens and the potential for many workers with variable schedules to be inappropriately classified as full-time. Instead, the IRS has adopted an approach recommended by the Association, which would use a “look-back/stability period” method under which an employer would determine an employee’s full-time status by looking back at a defined period (not less than 3 months, but no more than 12 months) to determine whether an employee averaged at least 30 hours per week. The use this “look-back/stability period” regulatory approach will provide employers more flexibility in plan design and ensure that employees are not bouncing back and forth between employer and exchange coverage.