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Administration Issues Guidance on Full-Time Employees Under Affordable Care Act

Late Friday, on the eve of Labor Day weekend, the Obama administration issued long-awaited guidance designed to assist employers to identify their full-time employees for purposes of either offering health coverage or paying penalties under the Affordable Care Act. The coverage and penalty provisions take effect Jan. 1, 2014.

The centerpiece of the guidance is a “look-back” or stability period safe harbor, which ASA and its allies have been advocating for more than a year. The guidance will allow employers to select an up to 12-month measurement period (look back) for both “ongoing” and new “variable hour employees” to determine whether they are full-time employees. A new variable hour employee is defined as an individual who, based on the facts and circumstances on the individual’s start date, the employer cannot reasonably determine will work full-time (i.e., average of at least 30 hours per week) or, if the employee is expected to work full-time initially, whose period of full-time employment is expected to be of limited duration and the employer cannot reasonably determine that the employee will work full-time over the course of the measurement period.

ASA believes that the definition of variable hour employee will cover the great majority of temporary employees employed by staffing firms.

The guidance invites comments on whether other safe harbor methods should be available to employers to determine the full-time status of “temporary staffing employees, short-term assignment employees, employees hired into high turnover positions, and other categories of employees that may present special issues.” ASA plans to meet with administration officials in the near future to discuss whether additional rules would be appropriate for the staffing industry.

The guidance issued Friday is not the last word on the subject. Formal proposed regulations will be issued for public comment at some future date yet to be determined. But the administration says employers can rely on the guidance at least through 2014.

ASA will provide a more detailed analysis of the guidance in a special workshop at Staffing World 2012, and in Webinars and other informational materials once the association has completed a review and discussed with the administration any remaining issues specifically applicable to the staffing industry.

A copy of the look-back/stability period safe harbor guidance is available at On that site, you can also find separate guidance explaining how the look-back rules coordinate with the 90-day waiting period provisions of the law.