As an applicable large employer, it can be stressful to stay up to speed on the ACA reporting requirements. One area of reporting that can be easily overlooked by employers is their seasonal workforce.
These seasonal employees may be working full-time or part-time but they are employed on a temporary basis. Employers must be careful of how many hours these employees are working and the length of time that they are being employed, otherwise penalties will come into play.
Definition Of A Seasonal Employee…
The ACA understands that seasonal employers can become a grey area, therefore they have set up an exception for them. The definition of a seasonal employee is an individual that will work for you for six months or less. You are not obligated to make them a health insurance offer.
What Is The General Rule For Seasonal Employees?
Here is the general rule for employers who must participate in ACA reporting…If you have a workforce that exceeds fifty full-time employees for a period longer than one hundred and twenty days, you are considered an applicable large employer.
If you are an applicable large employer then you must report. If you are a business that doesn’t report and is not considered an applicable large employer, then it is especially important to adhere to this rule. If seasonal employees set you over this limit unknowingly, and you don’t file ACA forms with the IRS, you will get hit with penalties!
How To Measure A Seasonal Employee’s Hours…
So, how can employers track their employees hours to ensure that they are staying ACA compliant when it comes to their seasonal employees? The Look Back Measurement Method is approved by the IRS and therefore commonly used by applicable large employers.
This is great for a business that has a workforce made up of a lot of part-time workers. Let’s break down how this method works. An employer chooses a measurement period that is between three and twelve months. Keep in mind, a longer measurement period will be more accurate in the long run.
Here is a simple example. If an employer chooses a measurement period of twelve months, they will track their seasonal employees’ hours each month. As long as this employee is not working an average of thirty hours a week for all of the twelve months, then the applicable large employer is not obligated to offer them health insurance. This is how they are maintaining their ACA compliance.
Tracking seasonal employees is just one of the complex aspects of ACA compliance. Keeping up with reporting requirements can be difficult for any applicable large employer, but ACAwise is here to help! From generating your forms, to catching any mistakes, to transmitting your forms to the IRS, ACAwise keeps you compliant from start to finish!