How Does the Reduction of Employees Hours During the Coronavirus Epidemic Impact the ACA Measurement Guidelines?

With efforts to help reduce the spread of the coronavirus epidemic many companies that employ hourly workers such as restaurants and bars were ordered to close.  Many other industries due to shelter in place orders around the country have had to resort to short term layoffs, or furloughs, of their employees due to the lack of work.  The government has passed legislation to try to help companies and employees with a stimulus package to get through these months where income has come to a halt.  However, once the coronavirus spread has slowed and companies are able to open back up and start bringing back workers there will be questions on how the temporary layoffs or furloughs will impact companies when it comes time to determine their eligibility for an offer of health insurance.  

Under ACA guidelines companies need to offer health insurance coverage to employees that average over 130 hours per month.  There are two methods of measurement used to determine eligibility for their variable hour workers, a.k.a. hourly workers, The Monthly Measurement Method or The Look-Back Measurement Method.  It is recommended under the current circumstances that companies use the Look-Back Method to minimize the risk of ACA penalties. For the Look-Back Method you can set a measurement period, typically 6, 9 or 12 months, not to exceed 12 months, add the total hours for the employee for the designated measurement period and divide by the number of months you were measuring to get the average.  Since there will be a gap in hours for the time an employee was not working during the epidemic, employers need to know how this can impact the measurement for an employee. It is recommended to consult a knowledgeable ACA reporting company to make sure your company is adhering to the ACA reporting guidelines and avoiding possible exposure to penalties.  

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