Employers subject to the employer responsibility provision in the federal Patient Protection and Affordable Care Act (ACA) must establish annual measurement and stability periods for determining which variable hour employees are to be offered health care coverage by the employer. The federal rules allow 2013 to be a transition year wherein measurement and stability periods may differ in length. However, beginning with the 2015 coverage year, both the measurement and stability periods must be the same length of time.
- The look-back measurement method is the preferred method of tracking the hours a variable employee worked, and is referred to as the measurement period. If the employee worked an average of 130 hours a month, he is considered a full time employee, and must be offered coverage.
- The initial measurement period is the first measurement period that applies to new employees.
- The standard measurement period is the measurement period that applies to ongoing employees. Employees graduate to the standard stability period when they have been employed for the full standard measurement period.
Stability Period: The period in which the employee is "locked" in his status based on the hours worked in the preceding measurement period, regardless of how many hours the employee actually works in the stability period.
Administrative Period: The optional period during which an employer can gather and analyze data to determine which employees are full-time, notify of eligibility, and enroll eligible employees. The administrative period can be no more than 90 days.
Note: The administrative period also includes the period of time between the hire date and the start of the measurement period as well as the time between the end of the measurement period and the date coverage is made available. The total number of days cannot exceed 90.
New Hire: Although we typically consider a "new hire" as an employee who was recently hired, it is important to remember that for ACA purposes, a new hire is any employee who has not yet completed their initial measurement period. Depending upon the starting month of the medical plans and the length of the new hire measurement period, this may encompass employees with hire dates back to 2014.
The final regulations provide two different measurement methods for purposes of measuring employees: monthly measurement and look-back measurement method. We have support for the Look-back measurement method. Under the look-back measurement method, an employer determines the status of an employee as a full-time employee during a future period (referred to as the “stability period”), based upon the hours of service of the employee in a prior period (referred to as the “measurement period”).
There are two groupings that need to be configured to manage eligibility. The New Hire Period is used for new hires, or employees newly classified as variable hour employees in their first measurement period. The Stability Period is used for ongoing employees, once they have been employed a full measurement period.
New Hire Periods: New hire (initial) periods are for new hires and are automatically assigned based on the hire date
- Period Begins: This is set to 1st of the Month after Hire Date by default.
- Measurement Period: Select period up to 12 months in which the new hire hours are measured and then offered their initial coverage period. If the suggested 12 month measurement period is not selected for the New Hire Period, the employee will still have a 12 stability period to coincide with the ongoing measurement period.
TIP: "Orientation Periods" are not supported as they would delay when the measurement period starts for an employee. Orientation Periods should be included in the Initial Measurement Period.
- Administrative Period: Select the period of time between the end of the measurement period and the beginning of the stability period, between 1-3 months.
Standard Stability Period: Used for ongoing employees, once they have been employed a full measurement period.
- Beginning Month: Select the month the medical plan year begins. This is the start of the 12 month stability period.
- Stability & Measurement Period: System option set to 12 months, period in which the employee hours are measured and the length of the offered coverage.
TIPS: An employer that sponsors a calendar year plan will need its measurement period to be complete before its open enrollment period for the coming plan year.
- Administrative Period: Select the period of time between the end of the measurement period and the beginning of the stability period, between 1-3 month.
Once you have set up your Measurement periods, stability periods will be generated as shown below:
To view the Measurement and stability periods for an individual employee, go to the EMPLOYEES tab >>> search by last name >>> Employee Management page >>> Manage ACA.
Let's take a look at some examples:
Example #1: Existing employee - hired prior to the first measurement period required for ACA eligibility determination and reporting. Currently being measured for the 2017 stability period.
Kyle Aldrige - Hire Date 02/02/2008
Example #2: Employee Hired in 2014, completed new hire measurement period. Currently in new hire stability period and being measured for the 2017 stability period. You will see that the New Hire stability period and the 2016 stability period overlap. Once an employee completes their initial measurement period, they are then moved into the ongoing measurement and stability periods with all other existing employees to line up their stability periods with the company plan years.
John Aqueduct - Hire Date 04/15/2014
Example #3: Employee hired in 2015, currently in new hire measurement period. If employee in confirmed eligible, their new hire stability period will begin mid-year 2016. At that point, the employee will be added to the ongoing measurement period and will be measured for the 2017 stability period. Again, the new hire measurement periods and initial stability periods for this employee will overlap with the ongoing measurement and stability periods for the group.
Alexandria Avenue - Hire Date 05/05/2015
- What if my stability/measurement period is not 12 months?
- Employee Navigator supports a 12 month measurement and stability period only. Most employers use 12-month measurement and stability periods, to minimize record keeping requirements and to match the stability period for ongoing employees with the plan year.
- How do I change my measurement periods once they have been saved?
- A request must be sent to support to unset measurement periods.
- What if my company offers multiple plans with different start dates?
- The system supports one stability period that coincides with the plan year start date. Multiple stability periods cannot be supported.
- Do the system support an Orientation period?
- Employee Navigator does not support the Orientation period.
- What should I expect if a VH ee is termed and then rehired?
- When a Variable Hour employee is terminated and then rehired, the rehire date reset the employee's measurement period.