Our client is a landscaper with seasonal employees. They measure the seasonal employees hours over a 12-month period and these seasonal employees average 30 hours or more a week even though they are temporarily laid off. Open enrollment coincides with the end of the 12-month ongoing measurement period when the seasonal employees are laid off, so seasonal employees aren’t offered coverage at the end of the ongoing measurement period. They are offered coverage once as new hires, but are not given an opportunity again to enroll since they are laid off during open enrollment. It is being reported on the 1095-C that employees were offered coverage. To be in compliance, it is my understanding that an annual offer of coverage must be made to all eligible employees, but in this case, no additional offer of coverage is made when the 12-month ongoing measurement period ends.
How can this client can get into compliance? Can the client make an offer of coverage even though the employees is laid off? Could they wait to make the offer of coverage until the employee returns?
Offers of coverage to individuals are reported on Form 1095-C for each calendar month. Each month should be populated with the correct code to reflect whether coverage was offered for that month.
The employer should consider how the ACA’s break-in-service rules apply to the seasonal employees and whether they are treated as “new” or “continuing” employees when the resume performing services after being laid off. Depending on the facts, the seasonal employees could be considered “continuing” employees under those rules. A continuing employee that returns during a stability period in which the employee is treated as a “full-time” employee must be offered coverage as of the first day that employee is credited with an hour of service, or, if later, as soon as administratively practicable. For this purpose, offering coverage by no later than the first day of the calendar month following resumption of services is deemed to be as soon as administratively practicable. If that employee was previously offered coverage for the entire stability period and declined, another offer for that stability period is not required.
While the look-back measurement method is used to determine whether an employee is a “full-time” employee for purposes of the ACA’s employer shared responsibility provisions, an employer is not required to use that method for health plan eligibility purposes. Whether an employee is “full-time” for ACA purposes is distinct from whether the employee is eligible under the terms of the employer’s health plan. An employer can choose to offer health insurance to employees who may not be “full-time” employees under the ACA and have such employees be benefits eligible.