What “Full-Time” Means Under the ACA
For the ACA’s employer mandate, a full-time employee is one who, for a calendar month, averages at least 30 hours of service per week, or 130 hours of service in the month.
Hours of service include:
- Hours worked, and
- Hours paid but not worked, such as vacation, holidays, sick time and jury duty
How the Definition Is Used
- ALE status: Full-time employees, plus full-time equivalents (FTEs), are counted to determine whether an employer is an Applicable Large Employer (ALE).
- Employer mandate: For an ALE, the employer mandate looks at whether coverage was offered to employees who meet this definition. An ALE may owe a penalty if it does not offer qualifying coverage to its full-time employees.
Things to Know
- Plan eligibility is set by the plan. The ACA’s 30-hour definition is used for the employer mandate. A plan’s own eligibility rules, along with carrier and state rules, determine who can enroll. An ALE whose plan uses a higher threshold, such as 40 hours, may have penalty exposure for employees who meet the ACA’s 30-hour definition but aren’t offered coverage.
- Measuring full-time status: Employers can determine full-time status month by month or by using a look-back measurement period. See Eligibility and Measurement Determination.
- Plan documents: Because these rules affect who is eligible for coverage, they’re typically described in the employer’s ERISA plan documents, such as the plan document and Summary Plan Description (SPD).
Important: This information is provided for general educational purposes. It is not legal or tax advice. How these rules apply depends on each employer’s specific circumstances, so employers should review their situation with their own legal counsel, ERISA attorney, CPA or tax advisor.