ACA math for special unpaid absences: Crediting leave for FMLA, jury and military duty

ACA math for special unpaid absences: Crediting leave for FMLA, jury and military duty

Content updated May 30, 2018

In its regulations for enforcing the Affordable Care Act, the IRS singles out three situations of unpaid absence from the job that all employers who must be ACA-compliant need to take into account when tracking an employee’s eligibility for health insurance:

  • Absence to serve on a jury
  • Absence under the Family and Medical Leave Act of 1993 (FMLA)
  • Absence under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA)

When using the Look-Back measurement method to determine full-time status, the IRS allows employers to use one of these two methods of calculating averages to account for this time:

How to credit ACA hours for unpaid leave_Integrity Data

  • METHOD 1: Look only at the time worked and base the 30-hour threshold on that time.
  • METHOD 2: Credit the employee with hours as if they had worked during this unpaid time.

Integrity Data’s ACA Compliance Solution uses Method 2 – crediting hours as if the employee had worked that time. We have found that Method 2 creates less confusion by equalizing all employee hours.

The averaging calculation for either not penalizing the employee or crediting them with hours – as if they had worked – is the same for all three absences.

The important factor to note is that the results of either method will always be identical for determining the average hours per week.

In our example, an employee was credited with 1,421 hours of service while not on unpaid leave. This employee was then on unpaid leave for six weeks. The employer is using a 12-month measurement period.

  • Method 1 would test the employee within the measurement period for only the actual time they worked – not the six weeks of unpaid leave. So instead of using 52 weeks, 1,421 would be Example of crediting ACA hours for unpaid leave_Integrity Datadivided by 46 weeks to get an average of 30.89 hours a week.
  • The Integrity Data ACA Solution will use Method 2, by getting the average hours per week that the employee worked while not on unpaid leave, and then credit the unpaid leave time with those average hours.

Learn more about Integrity Data’s ACA Compliance Solution here.

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