I need help understanding the continual testing in the IMP and SMP for my PT employees. When do I make offers of Coverage? How long do they stay on the insurance?
Q: Once a part-time employee becomes eligible for health care benefits through the ACA by working over an average of 30 hours per week over a 12-month lookback period, how long do they have to enroll in the health plan once the offer is made to them?
A: Once a variable hour employee has tested eligible for coverage in either a SMP or IMP, you must offer them coverage within the associated administrative period for that test.
Q:Do they get to choose to enroll again during the upcoming groups SMP open enrollment period if their respective stability period is not completed?
A: The natural process of testing is a measurement period, followed immediately by an administrative period and then followed immediately by a stability period. When one measurement period ends another immediately begins. With this scenario you will also find that the next testing period will end prior to the previous stability period ending. See the illustration below.
Watch On-Demand: Determining Eligibility for Health Coverage
As you can see from this example the second measurement period testing will be completed during the first measurement periods’ stability period. Notice that the stability period is continuous, when one ends the next starts. There are no gaps. If an employee tests eligible again in the second measurement period, their coverage continues. If they do not test eligible on the second measurement test but did on the first SMP, they remain on insurance until the first Stability Period ends.
Q:Our open enrollment period, administrative period, is during the last 2 calendar months of the year. If the employee simply does not enroll or does not choose to waive coverage, can the employer waive the coverage for the employee with notification to the employee?
A: You have to offer coverage, the employee is under no obligation to accept coverage. If they waive coverage you can assume they waive for the current stability period. Important to note is that all waivers are voided when the next testing takes place. Your question also points to assuming a ‘de facto’ waiver if the employee does not respond. That requirement changed late last year, 2015, when the budget reconciliation act was signed. Originally, employers with 200 or more eligible employees must automatically enroll them in health coverage or get a written waiver. That was repealed. Many of our customers are in the fast food business with multiple locations. They assume that any employee who was made an offer and did not respond has declined coverage. They keep track of the original offer letter and they provide one follow up letter.
Q:How do I track my new hires?
A: Each month new hires will become eligible based on completion of their Initial Measurement Period. Understand that in order for an employee to be tested in a Standard Measurement Period they must have worked the entire measurement period. New hires get their own initial Measurement Period that is tied to their hire date. To illustrate this look at the following: