Period may not be longer than 90 days.
longest measurement and stability periods
possible and thinks it will take 60 days
to process data and complete the open
enrollment process for newly eligible
employees. Compliance might choose
a 12-month look-back measurement
period from August 1 to July 30, a 60-day
Administrative Period from the following
August 1 to September 30, and a Stability
Period from October 1 to September 30.
Under this example, the
Administrative Period would take place
during the regularly scheduled open
enrollment period and the Stability
Period would coincide with the plan
year, providing the greatest amount of
administrative simplicity possible.
The Initial Measurement Period, on
the other hand, is used for new Variable
Hour Employees. Each new employee will
have his or her own Initial Measurement
and Stability Period. Therefore, at any
given time, a large employer will have a
Standard Measurement, Administrative
and Stability Period and separate
and distinct Initial Measurement,
Administrative and Stability Periods
likely ending in each calendar month.
Compliance's conclusion that this is an
administrative nightmare is reasonable.
The Initial Measurement Period can
be three to 12 months in length, with a
subsequent stability period that must be
the same length as the Stability Period for
Ongoing Employees.
end of the Initial Measurement Period
which may not exceed 90 days. However,
the combined length of the Initial
Measurement Period and the associated
Administrative Period may not extend
beyond the last day of the first calendar
month after the first anniversary of the
employee's start date (approximately
13 months).
longest measurement period possible and
thinks it will take two months to process
data and complete the open enrollment
process for newly eligible employees, it
may decide to implement an 11-month
Initial Measurement Period with a 60-
day Administrative period.
The Initial Measurement Period must
begin on the employee's start date or on
any date up to and including the first day
of the first calendar month following the
employee's start date.
on February 15, 2016, Compliance
may choose to begin the Initial
Measurement Period on March 1, 2016,
for administrative simplicity. The Initial
Measurement Period would then run
from March 1, 2016, through January
31, 2017, and would be followed by an
Administrative Period from February
1, 2017, through April 30, 2017. The
subsequent Stability Period would run
from May 1, 2017, through April 30,
2018.
Once a new Variable Hour Employee
has been employed for an entire
Standard Measurement Period, he or
she becomes an ongoing employee
the Standard Measurement Period.
Continuing our example, Compliance
would measure the new employee on the
Standard Measurement Period beginning
August 1, 2016, so long as he or she
remains an employee for that entire
Standard Measurement Period.
Determining who an employer's
full-time employees are is no simple
task and will likely require substantial
administrative preparation. A company
like Compliance or a company for
whom the Employer Mandate is not
effective until January 1, 2016, should
begin preparation immediately.
identifies its full-time employees, the
resulting penalties may be substantial.
an employer of this size should generally have been
paying PCORI fees, Transitional Reinsurance fees, and
should have applied for a Health Plan Identification
Number. However, for purposes of this article, we will
focus on the required offer of coverage to full-time
employees.
applicable large employer maintains a non-calendar
year plan as of December 27, 2012, and the plan year
was not modified after December 27, 2012 to begin at a
later calendar date, no section 4980H penalty will be
due for the period prior to the first day of the 2015 plan
year).
4 The Measurement Period governs the entirety of the
increase or decrease during the Stability Period.
6 26 C.F.R. § 54.4980H-3(d)(1)(vi). This regulation uses
8 26 C.F.R. § 54.4980H-3(d)(3)(vi)(B).
9 26 C.F.R. § 54.4980H-3(d)(1).
10 The Employer Mandate becomes effective January 1,