As an employer, you’re not just running a business; you’re also navigating a complex web of Affordable Care Act (ACA) regulations that may seem to change with the seasons. It’s absolutely vital that your in-house team is on the ball when it comes to ACA compliance. Why? Because slipping up could mean putting your business at risk for employer mandate penalties, not to mention additional penalties for inaccurate reporting.
It’s time to huddle up with your ACA compliance squad and dive into some serious Q&A. Here is a list of the top 5 essential questions that you, the employer, need to be asking your team. These questions are your starting point to gauge just how well your team understands the ACA and their ability to keep track of employee eligibility. Ready to get started? Let’s jump in!
What measurement method are we using to track employee hours?
A preferred method for measuring employees is the lookback measurement period, due to its reduced administrative burden. However, there is also a monthly measurement period. Which do you use?
What is a measurement period you ask? Measurement periods determine if an employee is full-time or part-time based on their hours worked. If someone averages 130+ hours per month during a measurement period, this indicates they are full-time, qualifying them for an offer of coverage for the following stability period.
Are we measuring new hires separately?
Were you aware that when you use the lookback measurement method, all new hires have an initial measurement period which could qualify them as full-time outside of your typical measurement period?
How are you tracking the initial measurement period? This is especially important when thinking of those employees hired in a part-time position, or a position that is seasonal or has variable hours, where it’s harder to predict if the employee will end up working enough to trigger penalties under the ACA.
How do we handle employees with different calendars and breaks in service?
Did you know that certain breaks in service (over 4 consecutive weeks) must be accounted for when averaging an employee’s hours to determine if they are full-time or part-time?
Special rules can trip employers up. For example: employers in the education sector must exclude academic breaks like the summer months from their calculations when determining who is full-time.
How are we tracking re-hired employees?
This is an important one and one we see overlooked often. Did you know that depending on the type of employer you are, employees who return to work within a specific amount of time might need to be treated as if they never left?
Think about an employee leaving a full-time position where they were offered insurance and coming back a few weeks later in a part-time capacity. Many employers don’t realize they might still qualify for coverage. How is your team tracking this?
What kind of information and resources about ACA law and compliance do we have access to?
The ACA is ever evolving, making it important to know who you are partnering with. Does your provider stay up to date with changes in the law and regulations?
Asking what level of support you will have is important. You need to know how much research you will need to continue to do to stay up to date on all things ACA if your vendor or provider isn’t.
At the end of the day, every one of the topics listed above — plus more! —is an example of how complex the ACA can be. Not only is it important to track your employees correctly, you need to also understand the law and how it is applied to avoid potential employer penalties.
This blog is up to date as of May 2025 and has not been updated for changes in the law, administration or current events.
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