Understanding the ACA Stability Period

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Understanding the ACA Stability PeriodVariable hour tracking can surely be a burdensome task for most employers. However, it is necessary in order to remain compliant with the ACA. As most employers know by now, a variable hour employee is one who does not have a set schedule that meets the average of 30 hours per week. Therefore, employers must track their hours worked to determine if these employees meet the full-time hour requirement of at least 30 hours per week or 130 hours per month. The ACA allows employers to utilize the Monthly Measurement Method or the Look-back Measurement Method to determine if a variable hour employee should be classified as full-time under the ACA. Both methods allow employers to determine eligibility in advance of the coverage period, otherwise called the stability period.

Breaking Down the ACA Stability Period

The ACA Stability Period is the time period that employers must offer health coverage to all employees who were determined to be full-time during the measurement period.

Coverage must be offered to these employees for the entire duration of the chosen stability period, regardless of how many hours they work during the stability period.

  • For example, if an employee averages 30 or more hours per week during the measurement period, that employee must be offered coverage for the entire duration of the stability period. Even if that same employee starts working less than 30 hours per week during the stability period.

There are a few things to keep in mind when establishing a Stability Period:

  • The Stability Period cannot be less than 6 months and not cannot be more than 12 months.
  • The Stability Period cannot be longer than the Measurement Period, except during the first year.

Most employers choose to use 12 month measurement and stability periods in order to minimize work effort and align ongoing employees with their plan year. Employers who have a calendar year medical plan will want to ensure that the measurement period is complete before the open enrollment period. This will allow time to review who has met eligibility and to make offers of coverage by the start of the stability period. For example, the measurement period dates for an employer who has chosen a 12 month measurement period and has 2020 calendar year plan, would be as follows:

  • Measurement Period: 11/1/2018-10/31/2019
  • Administrative Period: 11/1/2019-12/31/2019
  • Stability Period: 1/1/2020-12/31/2020

As you can see, this ensures that the stability period properly aligns with the plan year. Please keep in mind that employers are not required to choose a 12 month measurement, but most employers find it to be the most desirable option.

We Can Track it for You

Integrity Data’s ACA solution provides an easy and efficient way to maintain ACA compliance, including detailed eligibility tracking for all your variable hour employees. Or, if you are ready to hand all the hard work off to someone else, we can do it for you! Contact our team today for details.

Written by: Shellie Austin, Customer Engagement Manager - Integrity Data

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