Do you manage employees without set schedules? If they’re not averaging thirty hours per week, you’re dealing with variable hour employees. Especially common in service industries, variable hour employees can crop up in any business, even fields traditionally known for forty-hour workweeks.
As more variable hours employees replace traditional nine-to-fivers, the need for ACA hours tracking continues to increase. Simply put, if your company is large enough to offer employees health coverage, then any employee who averages thirty or more hours per week/130 or more hours per month is eligible for that coverage.
Measuring Methods for Variable Hours Tracking
Tracking hours for an initial measurement period, and then maintaining records with a standard measurement period, keeps the company and the employee aware of where their eligibility for health coverage stands. The ACA offers two methods for keeping tabs on your variable hours employees: Monthly Measurement, and Look-Back Measurement Method.
Monthly Measurement Method
This measurement simply looks out the number of hours an employee works in a month. If they work 130 hours in one month, they become full-time employees and eligible for employer health coverage. Their coverage eligibility begins two months after the first month of their full-time hours. Employers tend to use this method for salaried workers.
Look-Back Measurement Method
Employers who have employees working more varied hours will want to use the Look-Back Measurement Method. In this case, employers can set a measurement period, to determine if the employee averages 130 per month. The period is up to the employer, and must range between three and twelve months. If, during this time, the employee averages thirty hours per week or 130 hours or more per month, they have reached full-time eligibility.
The employer will also establish an Administrative Period, lasting no longer than 90 days, giving them time to review employees who have worked enough to be considered full-time, and offer them health coverage enrollment, if eligible.
Then, the employer must establish a Stability Period, which is the period of time they’ll offer health coverage to employees determined to have become full-time during the Measurement Period. During this period, which must be between six and twelve months, employees can receive health coverage whether they’re continuing to work full-time hours or not.
Employers should continue to track hours monthly throughout all of these established time periods. Trackable hours include working hours as well as paid vacation, holidays, sick leaves, leaves of absence, and other employee-sponsored hours. Jury duty, FMLA, and military duty also count towards an employee’s hours.
Simplified and Automatic ACA Tracking and Reporting
Wouldn’t it be nice if someone else did all this tracking? Good news: ACA tracking and reporting can be automated. Web Benefits Design offers Variable Hours Tracking as part of a benefits administration solution which takes the heavy lifting out of your HR reporting.
The WBD ACA solution handles hours tracking, importing hours from payroll, determining the status of hours worked, and reporting on findings. Get data on employees who are trending towards status changes, such as heading towards FT eligibility or tracking back towards PT status. Understand the costs of full-time employees with affordability reports. Check your measurement periods with measurement reports. Plus stability and look back reports to measure how your business is handling variable hours employees.
For employees, WBD makes sure they’re informed with status change communications, covered by sending all changes to carriers and payroll systems, and their hours tracked with continued measurement throughout Stability Periods.
It’s never been easier to get a handle on variable hours tracking, and the timing couldn’t be better. With so many companies experimenting with variable workforces, experiencing hours cuts or rolling furloughs, the time to establish a simple, time-saving solution for hours tracking is right now.
Learn more about the WBD benefits administration solution, or contact us to learn how we can improve your Human Resources experience today.