Last week, the Department of the Treasury issued Notice 2012-58, which provides further guidance on methods employers are permitted (but not required) to use in determining which employees must be treated as full-time employees for purposes of calculating any assessable payment under the employer shared responsibility provisions in section 4980H of the Internal Revenue Code. These provisions generally apply to employers with at least 50 full-time employees (“applicable large employers”).

Building on proposals set forth in earlier guidance, the details of which were described in a previous Ropes & Gray Alert, Notice 2012-58 provides a framework to determine whether variable hour and seasonal employees are treated as full-time employees for purposes of the employer shared responsibility provisions of the Affordable Care Act. The Notice reflects comments received in response to the safe harbor method previously proposed by giving employers the option to use a look-back measurement period of up to 12 months to determine whether new and ongoing variable hour employees and seasonal employees are full-time employees. The guidance also provides for the optional use of certain periods intended to enable employers to administer the determinations made, explains how employees can transition from the determination method used for new employees to that used for ongoing employees, and provides useful examples of how these expanded methods can be applied.

Please see full alert below for more information.