Look-Back Measurement Method: Reduction of Hours

Summary

If an employee who is initially hired as full-time experiences a reduction in hours before completing a standard measurement period, the Affordable Care Act (ACA) allows the employer to use the monthly measurement method until that employee completes a full standard measurement period. As a result, this will likely result in the termination of benefits if this employee continues to work part-time hours.

An employer can choose to adopt a more generous ACA eligibility policy and allow an employee to remain eligible.

This white paper discusses Applicable Large Employer (ALE) expectations for using the look-back measurement method when calculating benefits coverages. 

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