Smart Benefits: New IRS Guidance on FTE Look-Back Period
Monday, September 29, 2014
The IRS recently issued Notice 2014-49 related to the Affordable Care Act’s shared responsibility provision that proposes an approach for the application of the look-back measurement method used to determine if an employee is a full-time employee in certain situations.
Who Does the Method Apply To?
The look-back measurement method generally involves using an employee’s average hours of service per week during a period to determine if an employee is a full-time employee during a subsequent period.
In Notice 2014-49, the IRS proposes an approach to the application of the look-back measurement method when the measurement period changes in one of two situations:
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST-When the employee transfers within the same applicable large employer or within the same applicable large employer member from a position to which one measurement period applies to a position to which a different measurement period applies.
-When the employer modifies the measurement period applicable to employees in a permissible category.
What’s Different?
In the two situations described above, under the proposed rule, for an employee who has been employed for a full measurement period at the time of the transfer (and will either be considered a full-time employee or non-full-time employee for the stability period in that measurement period), the employee retains his or her status through the end of the associated stability period. For an employee who is not in a stability period (or administrative period) at the time of transfer, the employee’s status is determined using the measurement period that applies to the second position, but including hours of service in the first position in applying that measurement period.
Can it be Used Now?
Until further guidance is issued (and at least through the end of calendar year 2016), employers can rely on this notice.
Comments on the rules proposed in the notice can be submitted to the IRS until December 29, 2014.
Amy Gallagher has over 21 years of healthcare industry experience guiding employers and employees. As Vice President at Cornerstone Group, she advises large employers on all aspects of healthcare reform, benefit solutions, cost-containment strategies and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, and is often quoted by national publications on the subject matter. Locally, Amy is a member of SHRM-RI, the Rhode Island Business Group on Health, and the Rhode Island Business Healthcare Advisory Council.
Related Slideshow: New England’s Healthiest States 2013
The United Health Foundation recently released its 2013 annual reoprt: America's Health Rankings, which provides a comparative state by state analysis of several health measures to provide a comprehensive perspective of our nation's health issues. See how the New England states rank in the slides below.
Definitions
All Outcomes Rank: Outcomes represent what has already occurred, either through death, disease or missed days due to illness. In America's Health Rankings, outcomes include prevalence of diabetes, number of poor mental or physical health days in last 30 days, health disparity, infant mortality rate, cardiovascular death rate, cancer death rate and premature death. Outcomes account for 25% of the final ranking.
Determinants Rank: Determinants represent those actions that can affect the future health of the population. For clarity, determinants are divided into four groups: Behaviors, Community and Environment, Public and Health Policies, and Clinical Care. These four groups of measures influence the health outcomes of the population in a state, and improving these inputs will improve outcomes over time. Most measures are actually a combination of activities in all four groups.
Diabetes Rank: Based on percent of adults who responded yes to the question "Have you ever been told by a doctor that you have diabetes?" Does not include pre-diabetes or diabetes during pregnancy.
Smoking Rank: Based on percentage of adults who are current smokers (self-report smoking at least 100 cigarettes in their lifetime and currently smoke).
Obesity Rank: Based on percentage of adults who are obese, with a body mass index (BMI) of 30.0 or higher.
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