The answer is more complicated than an employee changing status from part-time to full-time. The rules governing this are rooted in protecting the employee’s coverage during their transition period. The rules generally require that the employer recreate the stability periods that would apply based upon the employee’s hours of service before the transfer.
In other words, you have to apply the previous measurement period (whether it be a standard measurement or initial measurement period) and test if that employee qualified for coverage. If so, they will be provided access in the subsequent stability period. Under the look-back measurement method, full-time employee status in a stability period is based on hours of service in the prior applicable measurement period, regardless of whether the employee experiences a change in employment status either during the measurement period or during the stability period.
Watch On-Demand: Determining Eligibility for Health Coverage
The final regulations also allow an employer to begin to apply the monthly measurement method in lieu of the otherwise applicable stability period beginning on the first day of the fourth full calendar month following the change in employment status. This rule applies:
- only with respect to an employee to whom the employer offered minimum-value coverage from at least the first day of the month following the employee’s initial three full calendar months of employment through the month in which the change in employment status occurred.
- only if, during each of the three full calendar months following the change in employment status, the employee has on average less than 30 hours of service per week.
Under this rule, an employer may apply the monthly measurement method to an employee even if the employer does not apply the monthly measurement method to other employees in the same category.
The best rule to use is to apply the previous measurement period for test purposes. If the employee’s hours would have satisfied them being eligible for coverage, then they will be within a stability period where they will be provided coverage like everyone else. You will test them again on completion of the next standard measurement period. If they have not completed a measurement period, you must continue to provide them access to health coverage during the current stability period in force based on the last standard measurement period.
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Last Review: 8/16/2022 – Revision: 2.0
Applies To: ACA Reporting Requirements
Categories: Employee Classification
Keywords: Continued coverage, Status