If an employee willingly wants to switch from full-time status to part-time, is the employer still responsible for providing health insurance benefits because they were hired as full-time?


Answer

The requirement to provide coverage is based on current full-time status and length of employment, not full-time status at time of hiring. If an employee switches to part-time they no longer have to be offered coverage starting on a specific date, that specific date depends on complex factors related to measurement periods.

Once a full-time employee is in "a stability period" (a type of measurement period), they must generally be offered coverage until the end of the calendar year regardless of their current hours worked (if they are employed, they must be offered coverage). With that said, the law allows for extra flexibility, resulting in shorter periods in which coverage has to be offered (6 months is the lowest right now, 3 was pushed for but rejected).

So, while full-time status is based on hours worked, the specific rules for measurement periods complicate things considerably in terms of how long coverage has to be offered and to whom.

One important note is that if you move to part-time, and thus your income changes, you may be able to be exempted from an employer plan due to affordability..

If you lose coverage (for any reason other than non-payment or quitting the plan, including an affordability exemption) you have a 60 day Special Enrollment Period to switch to a Marketplace plan (and a 30 day Special Enrollment period to switch to an employer plan, for those in the opposite situation).

If your employer does cancel your coverage because of you moved to part-time (after the applicable period), then this triggers special enrollment in healthcare.gov. If you choose to quit the plan, or are dropped for non-payment, it doesn't.

This answer may be complex, but it is never-the-less the correct answer. We had previously misunderstood details related to full-time status, but this current answer should be correct despite being rather general. Please see the links on the page for the nitty gritty details.

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Rich Bergman on


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It says”generally” then refers me to IRS and Labor Department. Was hoping to get a more definitive answer here

ObamaCareFacts.com on


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Thank you for writing back. We are researching this one still and will attempt to post the full answer.

The issue here is that employers use a “look back period” to determine employee hours for eligibility. That makes sense for determining if coverage has to be offered, what we haven’t been able to get the official answer to is what happens when that changes. We are unsure as to what that transition period looks like.

Since this could mean the difference between an employer owing the fee and not we wanted to avoid a definitive answer.

Here is a great resource for employer questions: http://www.gallagherbenefits.com/HCReform/QA

Anyone else who finds the answer out before we do is encouraged to post it below.

Rich Bergman on


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I appreciate your help! I looked on the link you provided and was unable to find the answer there either. I hope you are able to find an answer and look forward to reading it. Thank you so much for your help.

ObamaCareFacts.com on


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We updated the above answer with the fact that employers must offer a 30 day special enrollment period for the employee to switch to a new plan. We still haven’t completely found the answers to this question though. So more comments are welcome.

Rich Bergman on


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Thank you again! Look forward to further information

Rich Bergman on


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Anyone have any new updates about this matter?

Interested Party on


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Thank you for pointing me in the right direction. It seems that the law is unclear on this issue. Has anymore been done to further research it? What specific IRS policies, etc., are relevant to this issue?

Thank you!

Carla on


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Any new info on this topic. We have several employees that want to change to part time status. We want to make sure that we end their coverage properly.

ObamaCareFacts.com on

Still haven’t found the defacto answer, but from what we have gathered:

1. Employees who work at least 30 hours per week or whose service hours equal at least 130 hours a month for more than 120 days in a year are considered full-time.

2. Employers choose their own lookback period to determine full-time status. http://www.acareview.com/2014/07/administering-the-look-back-measurement-method/ Google “ObamaCare lookback periods” for more information.

http://www.understandinghealthreform.com/large-employer/who-is-eligible-for-benefits/

3. Employees have 60 days to enroll in a Marketplace plan after they lose employer coverage. An employer only gets a fine if an employee was supposed to be offered coverage and gets Marketplace coverage.

So given the above it would seem that having an employee’s plan end on the start of the next measurement period (payroll or the first) once they will not be working at least 30 hours per week or least 130 hours a month for more than 120 days. Giving it a month from the date they switch to part-time seems like a safe-bet as the employee couldn’t get Marketplace coverage at least until their plan ends. Again, this is unofficial advice. We are really hoping for an accountant to chime in with definitive answer or to find one ourselves.

Kyle on

Hi all – very interested in this topic as it has a lot of moving parts. I work for a large hospital in TX, and we have a number of folks contemplating the switch from full time to part time.

Our understanding from our attorneys is that we must continue to offer coverage for 3 months following the date of the status change. That ~90 day period also acts as a shortened initial measurement period for the newly-variable-hour employee, and at the end of those first three months, you must choose whether or not to continue offering coverage based on their average service hours per week during that 3-month transition period.

So, for example, if a full time employee switched to part time effective September 1, 2015, we must continue to offer coverage until November 30th, 2015. On December 1, 2015, we look back at the brief September 1 – November 30 measurement period, and if the employee averaged >= 30 hours per week during that time, we must continue to offer coverage. However, this is where our guidance starts to get more vague. We’ve been told that, in these situations, we must continue their measurement on a monthly basis (rather than the standard look-back method).

Continuing the above example, if the employee did indeed reach the service threshold from September 1 – November 30, we must continue to offer coverage for the following month, December 1-31. Whether or not we offer coverage the following January is dependent upon the employee’s average service hours per week during December. February 2016’s offer of coverage is dependent upon January 2016’s service hours, and so on.

Our guidance tells us to keep these employees on monthly measurement periods (following that initial 3 month transition period) “until the end of the standard measurement period in which the status change occurs”. Our standard measurement period runs from October 15, 2015-October 14, 2016, so it’s clear that we should keep the employee on the monthly method until October 2016. October 2016’s coverage would thus be decided by September 2016’s service hours. However, our administrative period would run from October 15, 2016-December 31, 2016, and the stability period is the following calendar year. Our guidance stops at the end of the standard measurement period, failing to instruct us as to what should be happening for the last 2 months of the year. If we’re to stop using the monthly method at the end of our standard measurement period (mid-October 2016), but we’ve been using it throughout the year to date, then what decides whether or not to offer coverage in November and December 2016? Also, what measurement period should we use to decide whether or not to offer coverage for the following stability period?

One line of thinking would tell us to continue the monthly method until December 31, 2016, and then for the following calendar year (stability period), use the previous standard measurement period (October 15, 2015 – October 14, 2016). However, I could also convince myself that we should use September 1, 2015 (date of status change) through October 14, 2016 (end of standard measurement period) as the measurement period this first time around. Using December 1, 2015 (end of 3-month transition period) through October 14, 2016 also sort of makes sense.

Sorry for the long post, but if you’ve read this far you can see how complicated this issue can get. I’ve not been able to find guidance anywhere on the IRS website or elsewhere, and as we all know the IRS hotlines are a maze that’s impossible to navigate, let alone get anything other than the most basic of information out of. If anyone has any thoughts, I’d love to hear them.

-Kyle, IRS Enrolled Agent

Deb Weiler on

I have just turned 65. I have Medicare Part B as my secondary insurance now. I would like to drop to part time. This means that the employer insurance will stop and Medicare will become my primary with some other supplemental. I am being told that I have to stop work and be unemployed for 13 weeks before I can start part time. This seems odd. Please advise.

ObamaCareFacts.com on

I don’t see how that could possibly be true? When you lose your employer based coverage for any reason other than non-payment it qualifies you for special enrollment. That rule works for every major insurance type as far as I know. I’m at a loss.

Caitlin Phelps on

What if someone is under a Section 125 health care plan regulated by the IRS. If they go part-time from fulltime does that enable the employer to cancel the benefits?

Bruce Witt on

The answer above is not clear.

Is moving from Full-time employee to a part-time employee a qualifying event to buy insurance from someone else?

ObamaCareFacts.com on

Yes, if moving from full-time to part-time results in the loss of coverage then you will qualify for special enrollment via healthcare.gov. I’ll double check the question and make sure it reads more clearly.

jay on

if you are a full time employee and decline benefits because the employee has medical coverage, is the employer still require to pay the non-benefited employee sick time taken off or KIN Care for your family members when the employee uses it?

ObamaCareFacts.com on

Not sure, good questions. Maybe a reader will have the answer.

Mary Andersen on

no, presented more questions than answers. It would be good to have answers such as:

if your employer uses the look back method, then….
if your employer uses the monthly measurement method then……

ObamaCareFacts.com on

Thanks for the feedback. That is good thinking, i’ll put it on the to-do list.

Gusty on

I retired from Federal Government in September 2011. I have health insurance through my retirement. I taught as an adjunct professor from January 2012 through May 2015 – a part time position. From August 2015 to May 2016, I taught as a visiting – a full-time position. I declined the college’s health insurance because I have it via retirement. I want to return to an adjunct, but the college is citing a 26 week break in service. This thread of questions seems to say I can. Will you cite some official rule that allows me to return to an adjunct? Thanks.

ObamaCareFacts.com on

I think that this Federal Register is the one that details the rules on adjuncts you are looking for: https://www.federalregister.gov/articles/2014/02/12/2014-03082/shared-responsibility-for-employers-regarding-health-coverage#h-34

However, there really is a bizarre rule about 26 week break in service that you can read here: https://www.employmentmattersblog.com/2014/10/the-affordable-care-act-countdown-to-compliance-for-employers-week-12-the-treatment-of-unpaid-leaves-of-absence-under-the-look-back-measurement-method/

Single payer anyone?

Briana on

I was a full time employee up until 9-1-15. I was dropped to part time because I did not meet the 30 hr/WK requirement following my company’s look back period. I generally don’t pick up my check stubs because I have direct deposit, but recently picked a check stub up from HR and saw that I am still paying for insurance $144/WK. YTD $3620. I have not used the insurance because I was told I had been dropped and I am unsure how long it was carried over. My employer mentioned a mandatory 6 month period after being dropped to part time, but was unsure of details. I have a feeling they are avoiding paying me back. How do I find out when my insurance was officially dropped?

ObamaCareFacts.com on

Simple answer is, yes 6 months is the minimum. Your status as part-time and full-time can change month-to-month, but the requirement for employers to offer coverage is in 6 – 12 month chunks.

To fully understand see the following articles on measurement periods:

http://www.acareview.com/2014/12/better-not-cry-better-not-use-a-three-month-measurement-period-were-tellin-you-why/

https://www.ajg.com/media/1148540/handling-changes-in-employment-status-under-final-employer-shared-responsibility-regulations.pdf

https://obamacarefacts.com/questions/initial-measurement-period-start-date/

Concerned on

My husband is about to start school and go to part-time at his job. We were told we can’t cancel the insurance through his job. Then we were told by the insurance company that if he makes less that 30 hours they won’t take any money out. Well my husband just had a check of working only 14 hours and the health insurance was still taken out. How is this possible? I thought ObamaCare was supposed to help people, not hurt them. We have been made to have insurance or pay a fine. It just isn’t right.

Claire Goodman on

Very bad writing! The first two sentences do not make any sense, nor are they connected to each other. ALSO, the presence of an apotrophe at the end of the word “employee”, in BOTH cases, is incorrect. You are talking about more than one employee – in other words, plural. Making a noun plural does not require an apostrophe, in fact, an apostrophe means something different – “possession”. As in, “the emplyee’s jacket is on the floor”. The jacket belongs to the employee (singular); one employee possesses a jacket. However, if you want to show possession by more than one employee, you will put the apostrophe AFTER the s which makes the noun plural, as in: “this is the employees’ lounge”. More than one employee possesses the lounge.
Next problem: “If you LOOSE coverage”. I think you mean to say, “if you LOSE coverage”. These are two different words!
Next problem: “In regards”. The correct phrase when referring to something is “with regard to” that thing.
Never use “they” or “Their” – use “s/he” or “his/her” or “he/she”. Their and they are incorrect in the context used in several sentences above

ObamaCareFacts.com on

All good points. Some of the QA pages needed an edit but were missed due to the massive amount of QA pages. Thank you for taking the time to help. The current answer avoids the grammar errors (well most of them!) Still need to pass this to the editor for a final look! (UPDATE: Big fixes for this page, thanks for pointing this out, we have 1,000’s of pages to manage here!)

Stacey on

I am currently resigning from my full time job that I have worked at for 6 months. I was offered their health insurance, but am under the age of 26 and am therefore still covered under my parents insurance. I wanted to transfer from full time to per diem/PRN/as needed, and was told i would have to wait 3 months to begin working for the company again due to the affordable care act. I cant find any information about this anywhere and really would like to know where this law/rule is and if it actually applies to me. PLEASE HELP, thanks!

Jasmine on

If an employee is supposed to be working 30 hours per week and has been consistently working less, when can the employer change the employee to part-time status and terminate benefits?

Deb on

Clear as mud all of this ACA stuff. If I have an employee who started FT, denied our insurance, now goes to PT and looses coverage under their spouse, do they then get offered insurance if they are within the measurement/look back period? Would it be considered a life event?

ObamaCareFacts.com on

That is not a simple situation. It would make sense logically that if the FT rejected coverage, then you shouldn’t have to provide coverage… That said, I don’t know the technical details of this one. I would start looking on the IRS and department of labor websites or would contact a tax / coverage professional in this case. Sorry we couldn’t provide a more specific answer.

Eileen on

If my business dissolves and I start with a new name ans new EIN number with the same employees do I have to count their hours from pervious name when calculating who gets offered coverage in 2018?

ObamaCareFacts.com on

That is a great question. I have new clue to be honest with you. I would have to look this one up. You might want to consult a professional in this case. An entity who sells small business plans can probably answer that question. You would be asking about “measurement periods.”