Full Time (FT)
The ACA considers an employee to be Full Time (FT) if the employee averages either:
- 30 hours of service per week, or
- 130 hours of service per month
“Hours of service” includes most hours paid, including paid time off (PTO), sick time, paid jury leave, etc. It is more than simply “hours worked.” Note: Payments under workers’ compensation or state disability generally do not count as hours of service.
ALEs must offer all eligible FT employees affordable Minimum Essential Coverage (MEC) that provides Minimum Value (MV) [including at least MEC for dependent children to age 26].
Full Time Equivalent (FTE)
The ACA aims to ensure that all employers with an average workforce of 50+ full-time equivalent employees comply with the mandate. Because of this, employers must consider their non-FT employees in their ALE calculation. A Full Time Equivalent (FTE) is a sum of part time employees’ hours that, when totaled together, equals the equivalent of a full-time employee – using a divisor of 120 hours.
For each month, the employer totals all Part Time (PT) employees’ hours of service, and divides by 120. Each 120 hours accumulated by PT employees counts as one FTE.
For a PT employee who provides 121-129 hours of service, employers should enter a maximum of 120 hours in the monthly calculation, so one PT employee does not get counted as more than one FTE. (Example: 129 hours/120 = 1.075 FTE).
Remember, any employee who provides less than 30 hours of service a week, or 130 hours of service a month, is considered PT by ACA standards.
Refer to Word & Brown’s exclusive ACA Full Time Equivalent (FTE) calculator for help making this determination.
Seasonal Employees
A seasonal employee must generally be included in the group count if the seasonal employee is employed for more than 120 days during the calendar year.