Employer Guide & Glossary


Under the ACA EMPLOYER MANDATE, also referred to as the EMPLOYER SHARED RESPONSIBILITY PROVISIONS [ESRP], AFFORDABLE LARGE EMPLOYERS [ALEs] are required to provide AFFORDABLE offers of heath coverage that meet both MINIMUM ESSENTIAL COVERAGE (MEC) and MINIMUM VALUE to at least 95% of their FULL-TIME EMPLOYEES.

You can find explanations of these terms here.

ALEs therefore need to know which employees qualify as FULL-TIME EMPLOYEES.


  • NOTE: FULL-TIME EQUIVALENT [FTE] employee measures are not relevant here — only actual full-time employee status. Full-time equivalency is only used to determine an employer’s ALE STATUS.


A FULL-TIME EMPLOYEE is one who works at least 30 hours of service a week or 130 hours a month. For this purpose, ‘hours’ include each hour an employee is paid or entitled to payment for performing duties for the employer or entitled to payment even if no work is done (such as paid vacation or sick time).

The IRS approves two methods for determining an employee full-time status. The MONTHLY MEASUREMENT METHOD and the LOOK BACK METHOD.


This is the preferred method for many employers, particularly with more structured workforces and a majority of FULL-TIME EMPLOYEES. This method carries out month-by-month [or quarterly] data processing of an employee’s hours to verify full-time status.

Part-time employees in this method are also tracked on a monthly [or quarterly] basis.

When using this method, an offer of health insurance coverage must be made to workers within 90 days of the date they were hired.

  • NOTE: THE ADVANTAGES OF MONTHLY MEASUREMENT are efficiency & accuracy, reducing the end-of-year resource burden as well as enabling monthly diagnostics and pro-active risk management.

BENEFITSCAPE was the first ACA specialist to provide a MONTHLY MEASUREMENT METHOD to employers, including pro-active Flag & Fix regtech data diagnostics.

BENEFITSCAPE also carries LOOK BACK METHOD measurement for clients depending on their business rules, employee populations, and other needs, also applying FLAG & FIX DIAGNOSTICS and a full IRS filing simulation before the final ACA data submissions.


This method can be a practical option for employers with less clearly structured workforces, such as a shifting mix of part-time and full-time employees.

When using this method, a period of time known as the MEASUREMENT PERIOD of between 3-12 months is chosen to ‘look back’ at each employee’s hours of service.

Employees who average 130 hours per month during the MEASUREMENT PERIOD are considered full-time and must be made an offer of coverage.

This eligible status must be locked in during a subsequent period, which is known as the STABILITY PERIOD (between 6 and 12 months but in no event longer than the MEASUREMENT PERIOD).

  • NOTE: VARIABLE HOUR EMPLOYEES. For employers with a large proportion of VARIABLE HOUR EMPLOYEES, the LOOK BACK METHOD can have advantages. A new hire is considered a VARIABLE HOUR EMPLOYEE if, a time of hire, the employer cannot reasonably determine whether the employee will work full-time hours. The LOOK BACK METHOD allows the employer to monitor and measure an employee’s hours of service over time to find out if they are full-time. Using this method, employers gain more time to extend an offer of coverage to employees determined fulltime under the ACA.

If you have questions about ELIGIBILITY MANAGEMENT or any other aspect of ACA reporting & compliance, please contact BENEFITSCAPE , the leading ACA specialist.

BENEFITSCAPE provides bestin-class ACA services & intelligent FLAG & FIX REGTECH DIAGNOSTICS to 1000s of employers of all sizes, in all sectors, and on all major HCMs.

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