QUESTION: How does an applicable large employer address ACA requirements for summer interns and seasonal employees?
ANSWER: If you employ interns or seasonal employees, it’s a good practice to determine before or at time of hire how to categorize them and what ACA requirements may apply to their employment.
Interns can be structured in different ways, however, a paid intern is treated like any other employee. If an employee including an intern is hired to work full time and is expected to average at least 30 hours per week, the applicable large employee (ALE) should offer health coverage based on the company’s eligibility for new hires, ensuring that the waiting period is no later than 91 days from the hire date. If an intern is part time, the ALE should measure the intern’s hours with the same measurement period used for any variable hour or part-time employee. An unpaid intern who is not being paid for hours worked, is not considered a full-time employee or FTE under the ACA.
Some employers may use the terms interns or seasonal employees interchangeably, however, there are distinctions between the two. A seasonal employee is one whose employment must be six months or less and reoccurring each calendar year at approximately the same time of the year, such as summer or winter. If an ALE incorrectly classifies employees as seasonal but they are regularly working more than six months at a time, they really aren’t seasonal for ACA purposes. Seasonal employees are variable hour employees and if working on average over 30 hours per week, do not have to be offered coverage within 91 days of date of hire. However, average hours worked are determined based on the measurement period selected by the ALE.
Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act, Internal Revenue
Service, March 26, 2019, (See Q&A 27 – 28)
Questions and Answers on Reporting of Offers of Health Insurance Coverage by Employers (Section 6056), Internal
Revenue Service, March 26, 2019
ACA and Employers: How Seasonal Workers Affect Your ALE Status, Internal Revenue Service, July 2, 2018