Research desk: Under health reform, who is a full time employee?

at 04:14 PM ET, 11/03/2011

Commenter davencheez asks:

I see plenty of information saying that the employer mandate for health insurance will apply to “Full Time” employees. In the last few weeks I have begun to see 30 hrs mentioned as the threshold needed to meet the employer mandate. My question is about employees whose hours vary greatly from month to month. A staffing agency for example. These workers often fill short term needs, or are hired through a staffing agency temporarily while a regular employee is out. This can vary from greatly from month to month....How often is the mandate reevaluated? Does the staffing firm have to pay employer mandate for employees who only go into full-time hours temporarily? How does the employer healthcare mandate apply to temporary and varied schedule employees?

The health reform law does indeed specify that anyone who works more than 30 hours gets counted as a “full-time employee.” That’s a key distinction: employers are slapped with a $2,000 fine for any full-time employee that they do not offer health insurance.

The law, however, did not contemplate how to treat workers whose hours vary from week-to-week or month-to-month. That’s left Treasury sorting out how, exactly, to determine who counts as full-time.

The administration does have some ideas, but nothing is definite yet. In a 22-page notice issued this May, Treasury explored a “look back” approach: employers would look back over a consecutive period of employment for a given worker. That time period could be anywhere between three and 12 months, whatever the employer chooses, as long as those months were consecutive. If an employee averaged more than 30 hours per week during that time period, the penalties kick in. This approach, Treasury says, “would be designed to give effect to the statutory provisions while accommodating a wide variety of current eligibility and enrollment practices in group health plans.”

Employers, who have worried about the difficulties of counting workers’ hours, reacted positively to this Treasury notice. Retailers in particular, who often deal with varied staff hours, endorsed the guidance. Here’s a statement that the Retail Industry Leaders Association put out on the subject: “RILA appreciates Treasury’s proposed look-back/stability period as a flexible way to deal with the possible revolving door effect of workers moving between employer plans and exchanges.”

While this Treasury notice offers some options, the department has yet to role out a definition rule on this subject. That means this could all change as regulatory processes go forward. As for how often the mandate is evaluated, that’s a bit easier: it happens just once a year as part of a company’s annual tax filings.

 
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