Understanding ACA Eligibility

This section provides an overview of U.S. ACA – Employer Shared Responsibility for Affordable Health Coverage.

For general information about the ACA process as handled in PeopleSoft, see Affordable Care Act .

Based on the Affordable Care Act, employers employing at least 50 full-time employees (or a combination of full-time and part-time employees that is equivalent to at least 50 full-time employees) will be subject to the Employer Shared Responsibility provisions. Under these provisions, if these employers do not offer affordable health coverage that provides a minimum level of coverage to their full-time employees, they may be subject to an Employer Shared Responsibility payment if at least one of their full-time employees receives a premium tax credit for purchasing individual coverage on one of the new Affordable Insurance Exchanges.

Note: To be subject to these Employer Shared Responsibility provisions, an employer must be an ALE (Applicable Large Employer), i.e., the employer must have at least 50 full-time employees or a combination of full-time and part-time employees that is equivalent to at least 50 full-time employees (for example, 100 half-time employees equals 50 full-time employees). A full-time employee is an individual employed on average at least 30 hours per week; a half-time employee would be 15 hours per week.

The following terminology may be of use to understand ACA Eligibility:

  • Employer Shared Responsibility: Employers with 50 or more employees will be required to provide health benefits to full-time (30 or more hours per week) employees or pay a penalty per employee, depending on the situation.

  • ACA Full-time: An employee defined as working, or hired and expected to work at least 30 hours per week or 130 hours per month: (52 weeks x 30 hours)/12 months = 130 hours per month.

  • Standard Measurement Period: Determined by employer, and can be of duration from three to 12 consecutive months. The employer determines an employee’s average service hours based on the standard measurement period.

  • Stability Period: The stability period must be at least six months and not lesser than the standard measurement period. If an employee is determined to be ACA full-time during the standard measurement period, the employee is considered full-time during a subsequent stability period, regardless of the employee’s number of hours of service during the stability period, as long as the individual remains an employee. The stability period begins after the standard measurement period and after any applicable administrative period.

  • Administrative Period: The time between the standard measurement period and the associated stability period when employers determine ongoing employees’ eligibility for benefits coverage. The administrative period may last up to 90 days after the standard measurement period.

  • Limited Non-Assessment Period: A limited non-assessment period refers to a period during which an ALE member is not subject to Employer Shared Responsibility payment under section 4980H(a) of the Internal Revenue Code, and in certain cases section 4980H(b), for a full-time employee, regardless of whether the employee is offered health coverage during that period.

  • Ongoing Employee: An employee who has been employed by the employer for at least one complete standard measurement period.

  • New Employee: An employee who has been employed by the employer for less than one complete standard measurement period.

  • Variable Hour Employee: An employee for whom, based on facts and circumstances on his or her start date, it cannot be determined whether the employee is expected to work on an average of at least 30 hours of service per week during the initial measurement period.

  • Seasonal Employee: An employee who is hired into a position for which the customary annual employment is 6 months or less. For example, retail workers or ski instructors.