What is the look-back measurement method for determining full-time employee status under the Affordable Care Act?
Author: Brian Muse
The penalty an applicable large employer may be assessed for not providing health care coverage is based on the number of its full-time employees. For this purpose, a full-time employee is an employee who works on average at least 30 hours of service per week. The determination as to whether an employee is full-time is done on a monthly basis.
Since it is difficult to administer monthly tracking of full-time employment status, the IRS provides a safe-harbor look-back measurement method that an employer may use to determine which employees are considered full-time employees. Under this approach an employer uses hours credited during a measurement (also known as a look-back period) to determine an employee's full-time (or part-time) status and then uses that determination prospectively for up to 12 months.