We were asked that recently, proving that there is such a thing as a wrong question. Let’s break it down.

The same person may be both a “seasonal worker” and a “seasonal employee,” but those terms are used to discuss separate ACA subjects. This has caused great confusion.

Here’s how the Employer Shared Responsibility Cost final rules under 26 U.S.C. § 4980H define, “seasonal worker.”

The term seasonal worker means a worker who performs labor or services on a seasonal basis as defined by the Secretary of Labor, including (but not limited to) workers covered by 29 CFR 500.20(s)(1), and retail workers employed exclusively during holiday seasons. Employers may apply a reasonable, good faith interpretation of the term seasonal worker and a reasonable good faith interpretation of 29 CFR 500.20(s)(1) (including as applied by analogy to workers and employment positions not otherwise covered under 29 CFR 500.20(s)(1)).

26 C.F.R. § 54.4980H-1(a)(39); 79 Fed. Reg. 8,581 (Feb. 14, 2014.)

An employer of 50 or more full-time employees and equivalents for no more than 120 days in 2014 was permitted to exclude the hours of service of “seasonal workers” during that season and, if their exclusion dropped the monthly average of full-time employees and full-time equivalents back below 50, ALE status was avoided for 2015. That protected small employers with large seasonal workforces – for example, an agricultural processor that employees 25 year round but 500 for three months around harvest time.

“Seasonal employee” status relates to separate issues, including plan eligibility, waiting period compliance and coverage offer reporting. “The term seasonal employee means an employee who is hired into a position for which the customary annual employment is six months or less.” 26 C.F.R. § 54.4980H-1(a)(38); 79 Fed. Reg. 8,581 (Feb. 14, 2014). When discussing Forms 1094-C and 1095-C, refer to “seasonal employees,” not “seasonal workers.”

Unhelpfully, “seasonal” does not appear in the final IRS rules on ALE coverage offer information reporting, 26 C.F.R. § 301.6056-1 et seq.; 79 Fed. Reg. 13,231 (March 10, 2014). They just piggy-back on the “full-time employee” definition of the § 4980H rules. So, the question is when, if ever, a “seasonal employee” is a full-time employee under the § 4980H rules. In those months, the employee has the same status for coverage offer reporting purposes.

That brings us to the 2015 Instructions for Forms 1094-C and 1095-C, where we finally get some help. The “Limited Non-Assessment Period” (LNAP), during which a seasonal (or variable, or part-time) employee working full-time hours may be treated as not yet a full-time employee, includes, “the initial measurement period for that employee and the administrative period immediately following the end of that initial measurement period,” if the employer is using the look-back measurement method to determine the “full-time” status of seasonal employees. Instructions, p. 14, right column. However, the corresponding Form 1095-C, line 16 code is “2D” (Limited Non-Assessment Period), rather than “2B,” (not a full-time employee).

The specific instructions for Form 1094-C (p. 8) tell an ALE Member completing Form 1094-C to exclude from the Column (b) count employees in a LNAP but to include those employees in the Column (c) count.

In other words, a seasonal employee who has ACA “full-time” status under the § 49809H rules for a given month has the same status for Form 1095-C purposes. Most often, this should depend on whether the ALE Member was using the look-back measurement method, rather than the monthly measurement method (the default option), to determine full-time status of seasonal employees. If the initial measurement period is six months or longer, truly seasonal employees shouldn’t remain on the payroll until their eligibility date. But that option is available only for annual employment of six months or less. Someone hired to work full-time hours for an expected nine-month project was never a “seasonal employee.”