Affordable Care Act Overview for Texas State
The Patient Protection and Affordable Care Act (ACA) is a set of health insurance reforms passed by the federal government. Effective January 1, 2015, the ACA required large employers such as Texas State University to offer affordable health insurance benefits to all full time employees. This requirement is often referred to as the “employer mandate” of the ACA and the fines for non-compliance are severe.
Employee Categories under the ACA
The ACA definition of full‐time is different than our current State of Texas statute. As such, we monitor benefits eligibility for our state benefit programs and eligibility for health insurance under the ACA using two differing standards.
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Standard Full-Time Employee
Under the ACA, a standard full-time employee is one who works an average of 30 hours per week. This is measured and determined for the purposes of the ACA on a monthly basis as 130 hours worked per calendar month.
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Variable Hour Employee
Under the ACA, a variable hour employee is one who works fluctuating hours each week or month. We must measure their average work hours over a longer period of time to determine if they are full-time under the ACA.
If a variable hour employee averages 30 hours per week, which is the equivalent of 1560 hours per 12‐month measurement period, they would be considered full-time and offered health insurance at the conclusion of the measurement period if they continue their employment with us regardless of how many months the employee worked less than 130 hours or how many weeks they worked less than 30 hours.
If, during the measurement period, a variable hour employee becomes a standard full-time employee, the university must offer the employee (and eligible dependents) the opportunity to enroll in an employee health insurance plan at the time in which they become a standard full-time employee.
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Seasonal Employee
Under the ACA, a seasonal employee may work an average of more than 30 hours per week without being considered full-time provided these employees are limited to seasonal work only and do not exceed 120 days of work within their 12‐month measurement period, e.g. summer camp workers.
If an employee works multiple events or jobs throughout the year, even if each separate event or job is seasonal, that exceed 120 total days worked, then the employee would not qualify as a seasonal employee.
The ACA standards center around a 30 hour work week for benefits eligibility as described in detail below, while the State of Texas allows eligibility for some benefits based on a 20 hour work week.
Measurement Periods
Measurement Periods as defined in the ACA are not calendar or academic years. We have outlined the following measurement periods for our variable hour employees:
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Administrative Period: July 1 - August 31
(To identify and enroll eligible employees effective Sept 1.)
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Initial Measurement Period
In addition, each new hire has an Initial Measurement Period of the first 12 months of employment and then rolls into the next standard measurement period. These periods will overlap.
Hours are counted in whole calendar months.(E.g., an employee hired September 14, 2015 will have an initial measurement period of October 1, 2015 – September 30, 2016.)
They will then roll into the standard measurement period of July 1, 2016 – June 30, 2017. These periods overlap July 1, 2016 – September 30, 2016, so hours worked during these months are counted toward both measurement periods.
Breaks in Service:
We have many rehires at Texas State. A break in service must be more than 26 consecutive weeks to begin a new measurement period. Contact HR if you are considering hiring a non-benefits eligible employee (NSNR) that was employed by Texas State within the last six months to determine if the break in service is required.
Policies and Procedures
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Retroactive Time Entry
Hours worked by hourly students and NSNR staff must be entered and approved in SAP no later than one week after the end of the semi-monthly pay period. This will allow the employee to be paid on time and for the hours worked to be tracked for ACA eligibility.
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Hourly Student Workers
All student workers will be designated as “variable hour employees”. This means we will use the look-back method for their first twelve months of employment and each ongoing standard measurement period (July 1 – June 30). As long as the student does not exceed 1,560 hours in these 12-month measurement periods, they are not considered ACA eligible.
In addition, work study hours do not have to be counted toward total hours worked for ACA eligibility. It is important for adjustments to costing for work study vs. regular wages to be done immediately.
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Non-Student Non-Regular Staff
If a NSNR staff employee is only going to work intermittently throughout the year, they can be designated as a “variable hour employee” and follow the same look-back periods as student workers. This designation must be made at time of hire. An example is someone who may work 1-2 weeks at a time, but come and go several times during the year. If an employee has a combination of student worker hours and NSNR staff hours, the total must be counted towards the 1,560 limit.
If you need a temporary employee to work half-time or more per month on a continuous basis, you must use a third party service provider to hire the employee. You can find contracted vendors in the TSUS Marketplace via the SAP Portal.
Reports for Tracking Eligibility
Human Resources currently runs reports for the 12-month look back period for variable hour employees. Departments will be notified if an employee is approaching the limit.
We have developed reports for departments to be able to monitor hours worked by all NSNR staff and student workers.
Questions:
Questions may be directed to hr@txstate.edu or contact a member of the Benefits staff at 245.2557.