What is a limited nonassessment period for Affordable Care Act (ACA) purposes?

Author: Gloria Ju

A limited nonassessment period (LNP) generally refers to a period during which an applicable large employer (ALE) will not be subject to an employer shared responsibility (or pay or play) penalty under the ACA for a full-time employee, regardless of whether the employee is offered health coverage during that period. There are six LNPs:

  1. First year as ALE period;
  2. Waiting period under the monthly measurement method;
  3. Waiting period under the look-back measurement method;
  4. Initial measurement period and associated administrative period under the look-back measurement method;
  5. Period following change in status that occurs during initial measurement period under the look-back measurement method; and
  6. First calendar month of employment.

The first five LNPs apply only if the employee is offered health coverage, which provides minimum value, by the first day of the first month following the end of the LNP.