How many hours does an employee have to work to be eligible for health insurance

Employee Eligibility
Eligibility of Spouses and Children
Eligibility of Domestic Partners

Índice Show

Basic Information
Definition of Full-Time Employee
Hour of Service
Application of Hours of Service to Certain Categories of Employees
More Information
Employer Topics
Related Links
How many hours a week do you need to work before benefits?
Is 30 hours a week full
What is the 1000 hour rule?
Is 32 hours considered full

The general rule is that if an employer offers group health coverage to any full-time employees, the employer must offer coverage to all full-time employees (defined as those working 30 or more hours per week).

The employer also has the option of offering coverage to part-time employees (defined as those working 20 to 29 hours per week). If the employer offers coverage to any part-time employees, all of them must be offered coverage.

These rules apply regardless of the medical condition of the employees. In other words, an eligible employee can’t be denied coverage based on previous medical problems, otherwise known as preexisting conditions.

Below are more details regarding who can receive coverage under your business’s group plan.In addition, any dependents of eligible employees are also generally eligible for coverage under a group plan. Dependents include spouses, children, and in some cases, unmarried domestic partners. Dependents cannot enroll for coverage unless the employee has enrolled.

Employee Eligibility

An employer can cover any employee who is on the payroll and for whom he or she pays payroll taxes. Although employees can opt out of the benefit program, virtually all insurers do require that a minimum number of your employees participate in their plan.

See “Participation Requirements” in the tool box for more information.

Eligible employees generally include those who are on paid vacation, maternity or sick leave. With few exceptions, employees who are on unpaid leave are ineligible until they return to active work.

The following individuals are usually not eligible for small group medical coverage:

Employees covered under a collective bargaining agreement
Employees of unrelated organizations
Independent contractors
Non-employee directors of the company
Retirees
Seasonal employees
Temporary employees

Eligibility of Spouses and Children

Generally, coverage must be offered to an employee’s legal spouse and dependent children. Under the Patient Protection and Affordable Care Act, group insurance plans are required to extend coverage to adult dependents through age 26.

Employers may choose to expand the definition of child dependent to include children older than 26; age limits vary by plan. Check the evidence of coverage (EOC) booklet that you get from your insurer (or ask your agent or broker if you have one) to clarify definitions.

Eligibility of Domestic Partners

Employers may opt to extend health benefits to unmarried domestic partners of employees. If an employer chooses to offer coverage to domestic partners, the coverage must mirror the coverage extended to spouses.

Domestic partners can include:

Same sex,
Opposite sex, or
Both same sex and opposite sex partners.

Employees and their domestic partners must sign an affidavit of domestic partnership to establish that they are living together in a committed relationship, and intend to stay that way indefinitely. The purpose of the affidavit is to deter roommates or others who simply share living space from defrauding the insurer.

In the tool box, you can download a sample “Affidavit of Domestic Partnership” form. Remember these forms vary from one insurer to the next.

Basic Information

Determining which employees are full-time employees is central to the employer shared responsibility provisions. An employer must identify its full-time employees as part of determining:

If it is an ALE and, therefore, subject to the employer shared responsibility provisions;
To whom it must offer minimum essential coverage to avoid an employer shared responsibility payment; and
The amount of any potential liability for an employer shared responsibility payment. Note that an employer is not obligated to calculate its liability, and should not make a payment without first being contacted by the IRS.

Definition of Full-Time Employee

For purposes of the employer shared responsibility provisions, a full-time employee is, for a calendar month, an employee employed on average at least 30 hours of service per week, or 130 hours of service per month.

There are two methods for determining full-time employee status:

The monthly measurement method, and
The look-back measurement method.

Under the monthly measurement method, the employer determines if an employee is a full-time employee on a month-by-month basis by looking at whether the employee has at least 130 hours of service for each month.

Under the look-back measurement method, an employer may determine the status of an employee as a full-time employee during what is referred to as the stability period, based upon the hours of service of the employee in the preceding period, which is referred to as the measurement period. The look-back measurement method may not be used to determine full-time employee status for purposes of ALE status determination.

For more information on each of these methods, see section 54.4980H-3 of the ESRP regulations.

Hour of Service

An hour of service is:

Each hour for which an employee is paid, or entitled to payment, for the performance of duties for the employer, and
Each hour for which an employee is paid, or entitled to payment by the employer for a period of time during which no duties are performed due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence.

Exclusion from the definition of hour of service is provided for services performed in certain capacities, which are not counted as hours of service for purposes of the employer shared responsibility provisions:

Volunteer employees – Hours of bona fide volunteer service for a government entity or tax-exempt organization do not count as hours of service.
Students performing work-study – Hours of service do not include hours performed by students as part of the federal work study program or a substantially similar program of a state or political subdivision.
Members of religious orders – Until further guidance is issued, under certain circumstances, a religious order is permitted to not count as an hour of service work performed by an individual who is subject to a vow of poverty. For this exclusion to apply, the employee must be a member of the religious order and must be performing tasks that are usually required of active members of that order.
Compensation that is not U.S. source income – Hours of service do not include hours for which an employee receives compensation that is taxed as income from sources outside the United States (generally meaning certain work overseas).

For more information about these exclusions, see our Questions and Answers page and section 54.4980H-1(a)(24) of the ESRP regulations.

Application of Hours of Service to Certain Categories of Employees

Certain categories of employees have hours of service that are particularly challenging to identify or track. In other cases, general rules for determining hours of service in the employer shared responsibility regulations may present special difficulties. For these workers, employers are required to use a reasonable method of crediting hours of service that is consistent with the employer shared responsibility provisions. The preamble to the employer shared responsibility regulations provides guidance for the following categories on certain methods of determining hours of service that are reasonable and certain other methods that are unreasonable:

Adjunct faculty
Airline industry employees and others who work layover hours
Employees who work on-call hours

For more information about determining hours of service for certain categories of employees, see Q&A #23 in our Questions and Answers page and section VI.C of the preamble to the ESRP regulations.

More Information

More information about the employer shared responsibility provisions is available in our Questions and Answers. The Department of the Treasury and the IRS have also issued the following legal guidance related to the employer shared responsibility provisions:

Regulations on the employer shared responsibility provisions
Notice 2013-45PDF, announcing transition relief for 2014.
Notice 2014-49PDF, regarding a proposed approach to the application of the look-back measurement method in situations in which the measurement period applicable to an employee changes.

More information is also available in this fact sheetPDF issued by the U.S. Department of the Treasury.

Employer Topics

How many hours a week do you need to work before benefits?

If I am a full-time employee, is it required for my employer to offer me benefits? Larger employers, with 50 employees or more full-time employees are required to offer healthcare benefits to those workers working at least 30 hours a week, or at least 130 hours a month, or pay a tax penalty.

Is 30 hours a week full

Definition of Full-Time Employee For purposes of the employer shared responsibility provisions, a full-time employee is, for a calendar month, an employee employed on average at least 30 hours of service per week, or 130 hours of service per month.

What is the 1000 hour rule?

Guidelines. Part-time 50 percent FTE employees may not work more than 1,000 hours in a rolling 12-month period. Part-time 74 percent FTE employees may not work more than 1,559 hours in a rolling 12-month period. The rolling 12-month period is not a calendar year or a budget year.

Is 32 hours considered full

Wage Calculation - Part-time Employees. Question of Full Time: If an employer does not maintain regularly scheduled full time employees, it is the department's assumption that 40 hours is to be considered normal full time. A full-time workweek can never be fewer than 24 hours.