By Dennis Pierce
A key aspect of the Affordable Care Act (ACA), with important implications for school districts, is that it expands health insurance coverage by changing the definition of a “full-time employee” to someone who works at least 30 hours per week instead of 40.
To avoid penalties, employers with at least 50 full-time employees must offer coverage to at least 95 percent of these employees and their dependents. This Employer Responsibility Rule, also known as the “pay or play” provision, went into effect in 2015 for employers with 100-plus employees, and it goes into effect in 2016 for employers with 50 to 99 employees.
The law requires K-12 administrators to pay careful attention to who works an average of 30 hours or more per week, which imposes significant new data-tracking requirements on their schools.
Noelle Ellerson, associate executive director for policy and advocacy at AASA, the school superintendents’ association, described the following scenario:
“Suppose you have somebody who substitute teaches for two days a week, and then they coach two days a week or maybe they drive a bus. If you add all of those hours up, they could be working more than 30 hours. Under the original model, when the definition for full-time employment was 40 hours, they wouldn’t receive benefits—but under this one … the school district would have to provide benefits.”
The Employer Responsibility Rule contains various provisions and shortcuts for determining who is a full-time employee in a given year, depending on how many weeks they may have worked more than 30 hours—as well as how employees’ hours may be counted. These rules are far too complicated to summarize in a blog post, but two things seem clear.
First, school districts must either develop or hire the expertise to understand and apply these rules if they want to avoid penalties under the law, Ellerson says.
And second, districts must have a robust decision support tool that can help them carefully track and analyze their employees’ hours, such as an HR or employee management software program that can handle all these complexities—allowing administrators to make the correct determinations.