Under the Employer Shared Responsibility Provisions of the Affordable Care Act (ACA), large employers must offer health coverage to substantially all full time employees (and their dependents) or be exposed to possible penalties. In order to avoid all penalties, that health coverage must be affordable and meet minimum value.
Employers can determine full-time status either by counting each employee’s hours of service or by using one of the “equivalency” methods that apply for qualified retirement plans. Since most employers will count hours of service to determine full-time status, the proposed and final regulations offer two Measurement Methods employers can use. These are:
- Monthly Measurement Method
- Look-Back Measurement Method
This article explains what the Look-Back Measurement Method is and how to use it. It does not address the important first step of how to determine which Measurement Method to use, or the exceptions associated with the first step.