Eligibility for Health Benefits
How to Qualify
How to Qualify
- Do the state(s) in which the company operates have specific state-mandated requirements?
- Does the business qualify as an employer of a size that must provide health care plans?
- Does the type of worker count toward the company’s size for eligibility purposes?
- Does the specific employee type qualify for benefits?
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Employees generally fall into one of three categories when determining benefit eligibility:
- Full-time employees: Those who are reasonably expected to work full-time automatically qualify.
- Seasonal employees: These individuals do not qualify for benefits, but their hours are used when calculating the company’s size, so you must track them.
- Individuals with variable hours: They may be eligible, depending on whether they meet the criteria for a full-time employee.
Defining a Full-Time Employee According to the PPACA
A full-time employee is someone who has worked an average of 30 or more hours per week, or 130 hours per month, during the designated “measurement” period. This period is a timeframe of 3 to 12 months, chosen by the company, used to determine if an employee is eligible for benefits. If an employee’s average hours worked during this period exceed 30 per week, they qualify for benefits.
Stability Period and Newly-Qualified Employees
If an employee with variable hours qualifies for benefits, they become eligible during the subsequent “stability” period. This period must be at least 6 months long and is typically the same length as the “measurement” period. An employer can also use an “administrative” period of up to 90 days to handle tasks related to enrolling the newly qualified employee in the health plan.
This cycle of measurement, administrative, and stability periods is continuous throughout an employee’s tenure with your company. Many businesses opt for a 12-month “look-back” period with a 12-month stability period to minimize the frequency of this process.
Measurement Periods and Employee Categories
A company may have different “measurement” periods for various types of employees, such as:
- Union vs. non-union
- A separate period for each union
- Hourly vs. salaried employees
- A separate period for employees in each state
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It is crucial that all employees within the same category (e.g., hourly, by state, or any other breakdown) are treated consistently. If an employer owns multiple businesses, each one can have a unique measurement period.
Beyond can help you with this process.
Need Help?
If you still have any questions, please don’t hesitate to reach out. Our team will be happy to provide answers and assist you in any way we can.