Logo Ellen L. Joseph CPA Chartered

ACA Primer

Administrative Period Administrative Periods are optional and begin immediately after the end of the Standard Measurement Period and end immediately before the beginning of the Stability Period. Employers may wish to adopt an Administrative Period that is the same length as its annual benefits open enrollment period, but it cannot exceed 90 days.

Applicable Large Employer (ALE) An Applicable Large Employer (ALE) employed on average at least 50 Full-time employees, including Full-time equivalent employees, on business days in the preceding calendar year. Certain related employers are aggregated together to determine ALE status. Employers that are aggregated together for this determination include controlled groups of corporations (consolidated groups), partnerships or proprietorships under common control and affiliated service group members and are called ALE Members. ALE Members are required to offer Minimum Essential Coverage to Full-time employees and their Dependents.

Dependent A Dependent is an employee's child, including a child who has been legally adopted or legally placed for adoption with the employee, who has not reached age 26. A child is treated as a Dependent for the entire calendar month in which he or she reaches age 26. For purposes of the ACA, a Dependent does not include the employee's spouse.

Full-time Employee An employee who is employed an average of at least 30 hours of service per week is a Full-time employee (1,560 hours per year). Under the Affordable Care Act, 130 hours of service per calendar month is treated as the monthly equivalent of at least 30 hours of service per week.

Full-time Equivalent Employee Full-time Equivalent Employees are included only in the determination of whether or not an employer is an ALE Member. Hours of service of employees who are not Full-time employees during a calendar month (i.e., less than 130 hours of service) are pooled together (but no more than 120 hours of service per employee) and then divided by 120 to determine the number of Full-time Equivalent Employees for that calendar month.

Initial Measurement Period Period used by ALE Members to determine status of new Variable Hour Employees as Full-time or not Full-time under the provisions of the Affordable Care Act.

Minimum Essential Coverage (MEC) Includes employer-sponsored health insurance plans that are externally insured or self-insured.

Minimum Value A plan provides Minimum Value if the plan pays at least 60 percent of the costs of benefits for a standard population and provides substantial coverage of inpatient hospitalization services and physician services.

Ongoing Employees Employees who have been employed by the ALE Member for at least one whole Standard Measurement Period (i.e., their hire date is on or before the beginning of the current Standard Measurement Period).

Stability Period Period that immediately follows and is associated with a Standard Measurement Period (or Initial Measurement Period) and any associated Administrative Period during which the ALE Member treats the employee as Full-time or not Full-Time as determined during that related Standard (or Initial) Measurement Period. The Stability Period that follows the Standard Measurement Period should correspond to the ALE Member's insurance plan year.

Standard Measurement Period Period used by ALE Members to determine status of Ongoing Variable Hour Employees as Full-time or not Full-time under the provisions of the Affordable Care Act.

Variable Hour Employee An employee for whom the employer cannot determine whether the employee is reasonably expected to be employed on average at least 30 hours of service per week during the Standard or Initial Measurement Period. If a variable hour employee has at least 1,560 hours of service during their Initial Measurement Period or the Standard Measurement Period, they are Full-time for the subsequent Stability Period and must be offered an opportunity to enroll in MEC.