ACA Considerations for Furloughs and Layoffs During COVID-19

ACA Considerations for Furloughs and Layoffs During COVID-19

As COVID-19 severely affects various industries such as hospitality and food service, your organization may be experiencing mass furloughs and layoffs to protect your business. As you and your team work through these changes, ACA Compliance and Reporting may top be top of mind, but we're here to help you with these efforts to avoid costly penalties in the future.

Here are some things to consider:

Furloughed Employees: 

If an employee is in a stability period as Full Time and is furloughed without being terminated, ACA Compliance and Reporting states an offer of coverage must remain until the end of the stability period. If not, your organization could face penalties if the employee receives a premium tax credit through the marketplace or if offers of coverage drop below the 95% threshold.

ACA Knowledge Tip: To determine Full Time or Part Time status, many employers use the look back measurement methodology. This results in a stability period, which usually matches the look-back period, where the employee must be considered Full Time or Part Time regardless of their current number of scheduled or worked hours.

What about COBRA offers?

Reduction of hours via furloughing results in loss of health coverage (unless your organization is providing employees with coverage during furlough) which is a COBRA-qualifying event and your organization would need to offer COBRA coverage to those affected.

Rehire Support:

For Full Time employees who were furloughed or laid off and are being rehired within 13 weeks of their last day at work, your organization will need to ensure that their most recent offers of coverage remain in place.

This topic can be confusing and difficult to navigate. Let us help! Call us at (508) 655-3307 or email info@benefitscape with any questions. We're here to help!

News & Latest Posts


February 26, 2024

The IRS ACA reporting DEADLINES for TY23 [filing in 2024] are as…

ACA Reporting: IRS Codes Explained

February 15, 2024

There are two series of IRS CODES for ACA reporting & compliance. These…

ACA State Mandates: A Guide & Checklist

February 5, 2024

When passed, the Affordable Care Act [ACA] required individuals to purchase &…

Survival Kit: 226J Penalty Letters

January 18, 2024

As we enter the final straight for TY23 filings, the IRS continues…

So What Is Regtech and Why?

December 11, 2023

The regtech market was valued at $9.8 billion in 2022; the forecast…

ACA TY23: “Is My Company An ALE?”

December 11, 2023

All Applicable Large Employers [ALEs] are subject to the ACA’s employer shared responsibility [ESR]…

Scroll to Top