Breaking Down Measurement Periods
The Purpose of Measurement Periods is twofold, designed to both protect the employee and the employer by either (a) ensuring the employee is offered medical coverage if the employee is deemed Full Time, or (b) ensuring the employer is compliant not offering medical coverage because the employee is not Full Time.
Measurement Periods use a pre-determined period (employer’s choice) to gauge an employee’s hours of service, allowing the employer to determine if an employee is considered a Full-Time Equivalent under the ACA. Once the Measurement Period expires, the employer will have another predetermined period to calculate the employee’s hours and offer them coverage if the employee averages thirty hours per week or more, this period is called the Administrative Period. After an employee's hours of service have been calculated, and they have been labeled as a Full Time Equivalent or will remain not Full Time, the employee will enter the final period. This last phase is the Stability Period, which is a period that either (a) the employee is guaranteed medical coverage or (b) the employer is not required to offer the employee coverage for the entire duration.
Standard Measurement Period (three-twelve months)
Designated segment of time where the employer will capture hours worked by non-full-time employees, which will then be used to determine if an ongoing (opposed to newly hired) variable or seasonal employee is deemed full time under ACA and eligible for health care coverage.
ProTip: this period is a window of time used to capture data
Employers may have different measurement periods for:
- Collectively bargained and non-collectively bargained employees
- Salaried and hourly employees
- Employees of different entities
- Employees located in different states
Administrative Period (zero-ninety days)
Designated period to begin immediately following the measurement period, used to allow the employer time to process the measurement period and offer coverage to qualified employees.
ProTip: this period is similar to Open Enrollment
The stability period begins immediately following the measurement period and the administrative period. This designated period must be the greater of six months or the measurement period for full time employees. If the employee is deemed not to be full time, the stability period cannot exceed the measurement period.
Hint: this period is like a benefit plan year
Measurement Period Visual