New Health Care Guidance on 'Full Time' Employees and 90-Day Waiting Period Under the Affordable Care Act


On August 31, 2012, the Internal Revenue Service issued guidance regarding the employer shared responsibility payment and the 90-day waiting period limitation provisions of the Patient Protection and Affordable Care Act (the “ACA”) in the form of IRS Notices 2012-58 and 2012-59.

Employer Shared Responsibility Payment – Determining Full-Time Employee Status.

The ACA added Section 4980H to the Internal Revenue Code (“Code”). Generally, Code Section 4980H provides that an employer with at least 50 full-time employees may be subject to a “shared responsibility payment” if the employer does not provide full-time employees with minimum essential coverage, or if minimum essential coverage is provided to full-time employees, but the coverage does not satisfy certain minimum affordability requirements. Code Section 4980H(c)(4) defines a full-time employee as one who is employed, on average, for at least 30 hours of service per week; however, applying this standard is not always easy, especially for seasonal employees and employees who work a variable schedule.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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