Do you Need to Offer Insurance to Seasonal Workers?
The Affordable Care Act (ACA) changed the insurance game for employers. Today, all large employers (those with 50 or more full-time employees) are required to offer health insurance. This sounds simple enough, but what about temporary, seasonal, or part-time employees. Are you required to offer insurance to seasonal workers?
For example, what if you run a Christmas Tree shop with 60 full time employees and are only open from October to December? Are you required to provide health insurance during those months? What about a snow-cone shack open from May to September with 52 full time employees?
This is where the ACA and seasonal employees can be a difficult road to navigate to remain compliant. The short answer is no, you are not required to insure seasonal employees. Here’s how the ACA breaks it down:
First, employees are considered seasonal if their employment is less than six months and typically begins and ends at the same time each year.
Second, if you hire less than 50 seasonal employees, and they work less than 120 days, or four full calendar months each year, (regardless of whether they’re consecutive), you are not subject to the ACA’s employer mandate to provide insurance.
Initial Measurement Period:
To determine whether your employees are full-time, you can use an initial measurement period. You can use this time (3 months to a year) to keep track of new employees’ hours. You can then use that information to determine whether to count them as full-time or not. This is often helpful for industries like retail where hours and demand fluctuate quite a bit. You don’t have to offer them health insurance during this time. This is still true even if they work 30+ hours per week while they are employed.
However, it is important to note that incorrectly classifying new full-time employees as seasonal employees in order to avoid offering coverage can cause big problems with Uncle Sam. For example, you hire a new employee to help with a work overload. If you anticipate they’ll be there 30-40 hours per week for more than 6 months, you must follow the normal rules regarding full-time employees.
There’s a lot to understand about the ACA and seasonal employees. With every rule, there are at least a few exceptions. Keeping it all straight and following the regulations is enough to make your head spin.
If you’re not up-to-date on current federal regulations, it may be beneficial to look into outsourcing options for your HR needs. Chances are, you could be saving money while still maintaining complete compliance with regulations. If you’re interested in someone else handling your HR workload, give us a call today!