The ACA and Seasonal Employees: 3 Things You Need to Know
Spring is here! And for employers of a seasonal workforce, remaining compliant with the complex Affordable Care Act (ACA) can be tricky.
The ACA requires applicable large employers (ALEs) to offer health care coverage to all full-time (30+ hours per week) employees. An ALE is a business that employs an average of 50 or more employees in the previous year.
The seasonal worker exception
Not all your seasonal people count towards the measurement of 50 or more employees. If most of the time your company is too small to be considered an ALE, and only becomes an ALE because you hire seasonal workers for up to 120 days during the year, then you are not considered an ALE and are not subject to the ACA's employer mandate.
“Seasonal worker” vs. “seasonal employee”
The term “seasonal worker” is only relevant for determining if an employer is an ALE or not. A “seasonal employee” is an employee who is hired into a position that begins about the same time each year and typically lasts for six months or less. No matter how many hours that employee works, the ALE will not be penalized for not offering health care benefits to them.
When seasonal really isn’t
While the seasonal employee rule sounds good, you must be able to prove that the position categorized as seasonal truly is seasonal. If your season has been more than six months for the past five years, you cannot suddenly claim it is less than six months this year for ACA purposes. For example, a farm laborer hired from April through November (8 months) is not a seasonal employee; a truck driver assisting with fall harvest (3 months) is a seasonal employee. Misclassification could trigger significant fines.
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