Date: Aug 01, 2014
Magazine:
August 2014-Western Grower Ag Legal Network

Dear Jon:

 

I’m still confused about when or if I need to offer coverage to my seasonal employees.  Can you shed a little more light on this subject?

 

 — In the Dark in Delano

 

Dear ITDID,

 

To answer your question, let’s start with the definition of seasonal employee: a seasonal employee is one who is hired into a position for which the customary annual employment is six months or less.  A large employer’s obligation to offer coverage only extends to full-time employees.  If you have employees that are truly seasonal employees, you will not owe them an offer of coverage.

The analysis doesn’t quite stop there, unfortunately.  Employees that are truly seasonal employees may be subject to the “look-back” rules, where their hours of service are evaluated over a period of time to determine whether or not they worked full-time (meaning they average 30 hours per week or 130 hours per month during this look-back period).

Employees that do not fit into the seasonal employee definition cannot utilize the “look-back” rules and the default monthly measurement method rules apply.  This means that an employee who is erroneously thought to be a seasonal employee may in fact be working “full-time” and owed an obligation of coverage much earlier than a seasonal employee who may be subject to the “look-back” rules.

For example, ABC Farms is a large employer with 100 full-time employees.  It hires employee Jon Doe to work full-time for eight months starting January 1, 2015.  Jon Doe cannot be characterized as a seasonal employee because the duration of employment exceeds 6 months.  ABC Farms would be required to track Jon Doe’s hours of service on a monthly basis from his hire date.  If Jon Doe works 30 hours a week or 130 hours a month on average, ABC Farms must ensure that he is offered coverage by the 1st day of the 4th month after his hire date (April 1, 2015).

It is imperative for Ag employers to understand how to accurately assess whether or not their employees can be characterized as seasonal employees in order to comply with the employer mandate.  Please note that the large employer mandate is effective January 1, 2015, for employers with 100 or more full-time employees and full-time equivalents.  For employers with 50-99 full-time employees and full-time equivalents, the employer mandate has been generally delayed until January 1, 2016.  Non-calendar year plans, in some circumstances, will be able to comply with the employer mandates as their plans renew respectively in 2015 and 2016.

For more information about this article or if you have other questions about health care reform, contact our Health Care Reform team today at HealthCareReform@wga.com or 800-333-4WGA.  Write to Dear Jon at dearjon@wga.com.

For more information and resources on Health Care Reform, visit www.wgat.com/health-care-reform

WG Staff Contact

Jonathan Alexander
Vice President & PCMI Compliance
949-885-2330

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