Insight to Action

Obligation to Offer Benefits to New Hires

11 February 2015

Perhaps one of the biggest pains in the neck about the employer mandate is that employers will have to track some new employees for a year to determine whether they're actually working full-time hours or not. The process is this:

First, at hire, is the position expected to work 30 hours or more per week? If yes, then that employee is a full-time employee from the start, regardless of how long you expect to keep that employee around. There are no exceptions for temporary employees, interns, and the like unless the employee qualifies as a seasonal employee.

If the employee is not expected to work 30 hours per week at the time of hire, then the employer has no obligation to offer that employee medical insurance. Instead, the employer tracks the non-full-time employee for a year-long measurement period based on the date of hire.

Think of it like a year-long waiting period. If the employee turns out to be working full-time hours, then the obligation to offer medical coverage attaches after the year-long initial measurement period. Employers get at least one month to run the initial measurement period report and then offer the coverage. The coverage should be effective no later than the first of the fourteenth month after hire.