Eligibility of 500 hours in 6 months

[Jim Chad]

The Corbel volume submitter with an Adoption Agreement has the option of "blank" hours in "blank" months starting with the employees date of hire...but then goes on to say that if the employee does not satisfy the initial period the requirements change to a year of service listed above. I would like it to stay at 500 hours in 6 months.

Does anyone know why I could not write into the "other" block "six months of service and 500 hours in a six months measuring period."?

[Lou S.]

Yes, as long as your retain the fall back year of service option for those who don't make the 500 hour 6 month rule.

Otherwise it is a 410 violation, 410(a) I think.

[Jim Chad]

Lou, I'm not sure I was clear. This employer is being more generous. Is there any regulation requiring the employer to be less generous to those that do not have 500 hours in the first six months? I can not see any way that someone could enter later under my "500 hours in six months" than the usual "1 year of service"

or am I missing something?

[Lou S.]

Lou, I'm not sure I was clear. This employer is being more generous. Is there any regulation requiring the employer to be less generous to those that do not have 500 hours in the first six months? I can not see any way that someone could enter later under my "500 hours in six months" than the usual "1 year of service"

or am I missing something?

To use an example -

Employee A works very part time and works only 400 hours in the first 6 months and does not enter the plan. But then that employee increases their hours such that they work 700 hoours in the second 6 months giving them a 1 year of service in the first 12 months. Or even more extreame Employee B works 600 hours a year (300 every 6 months) for 5 years then is hired full time at 2000 hours per year, employee B would come in under the 1-year of service rule. Unless you are checking eligibiliy every 6 month period and I'm missing the point.

Usually what employers are trying to do with these conditions is to keep out part timers from the plan while bringing in the full time ees in less than one year. It is fine to do that but if one of your part timers who doesn't make the 500 hour rule 6-month rule later satifies the 1-year of service rule they have to come in.

Typically with a 6 months service requirement you don't also have an hours requirement and everyone comes in after 6 months even the part timers is all I'm saying.

[Jim Chad]

I just heard back from Corbel and they said that anyone getting 1,000 in a year would have to have met my requirements. But they also suggested including the failsafe language to include anyone completing a year of service.....for added protection in an audit.

[Tom Poje]

in this case, you shouldn't have a problem.

If you had said you need 501 in 6 months, conceivable that individual could work 500 hours in 6 months and another 500 in the next 6 months. he would fail eligibility, but since he worked 1000 hours in a 12 month period he would have to come in.

Again, you don't have that situation, so you would be ok.