Employer Mandate 95% calculation method

[Benefits 101]

So how is the 95% threshold calculated? So lets say that an employer fails to offer coverage to an employee for one month... i.e. they forget to offer coverage to a part time employee who becomes full time (due to an accident like scheduling too much overtime)... for a month. But only one month, because that employee was an "accidental full timer" in that they were a part time employee who worked more than 30 hours a week for one month due to too that employee being scheduled a bit too much overtime (or they stay late to do extra work when it was busy). Then a few months later, that employee becomes full time officially and enrolls in benefits.

For this employee, was there a "offer of coverage"? Or is there NOT an offer of coverage because one month was missed?

[GMK]

Aren't all things ACA determined on a month by month basis?

You have to watch work hours vs. ACA-full time like a hawk and be prepared to offer coverage. If ACA-full time "accidents" are likely to occur, it may be better to use the measurement and stability period approach.

[Flyboyjohn]

Agree with GMK, employers who can have "accidents" need to use the look-back measurement method of determining an employee's FT status and not the monthly measurement method.

Using the look-back method ensures that the employer knows in advance whether an

employee is going to be treated as full-time (or not) for the following stability

period.

[Benefits 101]

The look back period is undesirable because the stability period is undesirable. Now back to the question at hand: are the "units" in measuring the 95% safe harbor based on people, months, years, etc.?

[GMK]

Item 25 here:

https://www.irs.gov/Affordable-Care-Act/Employers/Questions-and-Answers-on-Employer-Shared-Responsibility-Provisions-Under-the-Affordable-Care-Act

and this:

https://www.eidebailly.com/services/health-care-reform/look-back-measurement-safe-harbor-and-95-coverage-requirement/

appear to be saying that you look at it each month if you are not using look-backs.

[Flyboyjohn]

If not using the look-back then you're using the monthly method so the "units" are

CALENDAR months in which the employee works 130 or more hours.

If you've offered MEC to at least 95% of the employees who qualified as full-time for

that month then you've satisfied the requirements to avoid the "a" penalty for that

calendar month.

[Benefits 101]

Great, thanks folks!