Talking Stick - September/October 2014
[co-author: Emily Glenn]
The passage of the Affordable Care Act (ACA) has been a political hot button in the United States. Now that it has become law, though, the challenge has shifted to determining how the nuances of the ACA will play out in different workplace scenarios. College and university campuses - and campus housing departments in particular – have been no different in needing to find a solution to the legal quandaries related to student employees and whether or not they need to receive healthcare coverage from the institution.
It is no surprise that campus housing departments are largely dependent on student employees, particularly to fulfill the resident assistant positions. These RAs, particularly during the busiest times of year, can work enough hours to qualify as full-time employees. In addition, hours in which an RA is on-call (a common part of an RA's duties) are said to count toward the weekly averages that determine whether an employee is entitled to healthcare coverage. Based on the size of the campus, how the law is interpreted and implemented could mean having to provide healthcare coverage for hundreds of additional student staff.
What is the Affordable Care Act (ACA)?
The Affordable Care Act was passed by Congress and signed into law by President Barack Obama in March 2010. The ACA is complex and has numerous provisions that affect employers, including colleges and universities. One provision that many employers have been focused on in the last few years is the so-called employer mandate (also known as the play-or-pay mandate), under which a large employer must either offer full-time employees (and their dependents) certain coverage or pay certain penalties.A college or university with 50 or more full-time equivalent employees is considered to be a large employer and subject to the employer mandate.
How Is a full-time employee defined?
The ACA generally separates employees into full-time, part-time, and variable hour employees as well as seasonal (working six months or less) and ongoing (having been employed for at least one year) employees. A full-time employee is a non-seasonal employee reasonably expected to average at least 30 hours per week (or 130 hours per month).
Employers often know that certain employees are clearly full time because the employee is hired to work in a position that requires 30 or more hours per week. But even other so-called part-time, variable hour, and seasonal employees – who are not clearly identified as full time - might average 30 hours per week over a period of time. These employees can create difficult issues for employers trying to comply with the ACA.
Fortunately, ACA regulations allow an employer to use one of two so-called measurement periods to help determine full-time status. Under the first, the monthly measurement method, an employer determines each employee’s status by counting the employee's hours for each month. For most employers, the monthly measurement method is likely not the preferred approach because an employee might average 30 hours per week in January, drop below 30 hours in February, go back up to 30 hours in March, etc., thereby creating a month-by-month change in status. Consequently, most employers utilize an alternate method, the look back measurement period method, under which the employer measures an employee's hours looking back over a prior measurement period to determine whether to offer coverage during a subsequent stability period.
The look-back measurement period rules are complex. But generally, for new part-time, variable hour, and seasonal employees, an employer might measure an employee's hours for 12 months after their date of hire. If the employee averages 30 hours per week during the measurement period (the look• back period), the employee will then be offered coverage for the entire subsequent 12-month stability period regardless of whether that employee’s hours drop below 30 per week during the stability period.
How does the ACA define an hour of service?
For purposes of the measuring rules identified above, the ACA specifies that an hour of service is each hour for which an employee is paid or entitled to payment for performing duties for the employer, as well as each hour for which an employee is paid or entitled to payment for a period of time during which no duties are performed due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty, or leave of absence.
For employees paid on an hourly basis, an employer must calculate actual hours of service from records of hours worked and hours for which payment is made or due. For employees paid on a non-hourly basis, an employer must calculate hours of service by using (1) actual hours; (2) days-worked equivalency - where the employee is credited with eight hours for each day for which the employee would be required to be credited with one hour; or (3) weeks-worked equivalency - where the employee is credited with 40 hours for each week for which the employee would be required to be credited with at least one hour. Unfortunately, these hours of service rules don’t always fit cleanly with college and university employees.
What health coverage needs to be provided to a student who is considered full time under the ACA? Is the student health center or student health plan considered sufficient coverage?
If a college or university determines that a student is a full-time employee under the ACA, the college or university should offer them affordable, minimum value health coverage under the same group health plan that provides coverage to its other employees, i.e., not the student plan. The guidance on this issue is not crystal clear, but it seems that a student health plan is not a plan offered by a college or university purely in its capacity as an employer to participants based on each participant's respective status as an employee. Indeed, a student plan is a student-focused plan. For most individuals, eligibility to participate in a student plan is based solely on an individual's status as a student currently enrolled at the college or university. Therefore, it seems likely that a student plan is not a "group health plan" or an "eligible employer sponsored plan" under the Internal Revenue Code (the offer of which will avoid the employer-mandate penalty).
Colleges and universities should be careful about trying to classify a student plan as an eligible employer-sponsored plan. While this is tempting, given the difficulty in tracking student employee hours, there is concern that if a student plan is treated as an employer-sponsored plan, the college or university would need to be absolutely certain that it complies with all rules applicable to employer provided plans. That means the plan would have to include continuation coverage for qualifying events (such as a termination of employment), compliance with the relevant out-of pocket maximums, compliance with the nondiscrimination rules that will be applicable to fully insured plans once ACA regulations are issued, compliance with the relevant employer reporting rules, coverage of all the patient protections in the ACA, coverage of preventive health services, coverage of clinical trials, mental health parity rules, compliance with the Newborns' and Mothers' Health Protection Act, compliance with the Women's Health and Cancer Rights Act, and others.
What about RA on-call hours? Do they count toward the 30 hours?
On-call hours would count toward the 30 hours. However, this merely opens up the question of what is legally considered on-call. The IRS rules specify that an employer must credit an employee with an hour of service for any on-call hour for which payment is made or due by the employer, the employee is required to remain on-call on the employer's premises, or the employee's activities while remaining on-call are subject to substantial restrictions that prevent the employee from using the time effectively for their own purposes.
Unfortunately, beyond that, they have not yet provided any special rules for RAs. Obviously, RAs may have more freedom while on-call than some other types of workers, as they live and work in the same place. However, there are still restrictions on an on-call RA's activities. For example, he or she can't leave the campus area, or a certain area of campus, and the RA must respond to communications from the institution. If these are the expectations for the employee, any on-call hours likely should be counted for purposes of the ACA measurement rules.
What has been suggested is that offices review and revise the description of duties for RAs to try to narrow them - or clarify them - so that they clearly specify what on-call hours they get paid for, the limited circumstances when they are required to remain on premises, and that other than the times they are required to remain on premises they have the freedom to use their time for their own purposes. This revision should be done with the assistance of a consultant or a campus attorney. Further clarification of this interpretation of what constitutes on call status is still needed, but for now that is the law.
What about RAs who are compensated by having their room and board paid for by the institution? Would they need to be covered?
In this case, it is advised to check with an institution's legal staff for further consideration. In general, though, Long states that "If they're receiving a W-2 [from your institution]," they are likely employees.”
How should the working hours of RAs and other student employees be monitored?
The best approach for managing student employee hours is documentation, and plenty of it.
First of all, a housing department needs to have recorded what the RAs' expected hours are, based on the duties outlined in the position expectations. This should include on-call hours. Thus far, the IRS has declined to issue further instructions on whether student employees' on-call hours are any different from full-time professional employees' on call hours. So, for the moment, both regular duty hours and on-call hours are counted toward the 30-hour-a-week average that determines healthcare eligibility, unless the student is employed by a federal work-study program.
Secondly, it is important to inform the resident assistants exactly what duties and hours are expected of them each week and month. Also, make it clear that incidental "work" completed outside of these hours and duties - speaking with a resident in the campus recreation center, assisting with a housing situation asked about during a casual conversation in the lobby – do not count toward their weekly total hours. These tasks are simply done out of good will.
In the document in which the work duties are described and what does and does not constitute work is clarified, note how many hours it is estimated the paid work will take. If needed, provide estimates for different periods of the year; for example, move-in week is 30 hours, but an average week in the fall semester is 15.
Be very specific about the requirements of on-call hours and on-duty hours versus off-hours, and be accurate about estimating the time needed for the job duties. It may be necessary to prioritize the RAs' duties, to select the tasks that must be done versus the ones that have been traditionally done by RAs.
Finally, if it doesn't already exist, a department should implement a system to carefully track RAs' actual hours worked and teach RAs how to use it. This includes training about how to input on-duty and on-call hours into the system. This documentation will not only serve to help the department and the RAs track hours and duties, but it will also be useful if there are any questions from campus administrators or federal entities about RA working time and compensation. You're going to have to be a little creative, and creative doesn't mean doing anything wrong. But be a little creative, and work with people who are going to be a little creative with you, to help try to craft rules that will align with the ACA and what's actually going on.
As you all know, there's a disconnect between what is in these rules and what is going on at colleges and universities all across the country. And from what we've heard it's likely that they'll give us additional guidance on these employees at some point. So until then, we just have to do the best we can, document it, and make sure it has been checked for reasonableness by a third party.
This article appeared in the September/October 2014 issue of Talking Stick, the magazine of the Association of College and University Housing Officers-International. It is reproduced with permission from the publisher.
