Ongoing Employee

An ongoing employee is also referred to as a “continuing employee.” The ongoing employee is a non-contract individual employed by an applicable large employer (ALE). After completing one employment measurement period, during which it’s been determined that the person works at least 130 hours per month, benefits eligibility is determined as defined by the Affordable Care Act (ACA). 

What is an ongoing employee? 

Ongoing employees are people who typically work non-traditional schedules for an ALE. Even so, they may still meet the general definition of a full-time equivalent (FTE) employee by working at least 130 hours per month. New hires are not considered part of the ongoing employee definition because they have not yet completed the associated mandatory employment measurement period. 

Why is understanding ongoing employees important to my business? 

Understanding the ongoing employee term is critical if your business qualifies as an applicable large employer (ALE). ALEs employ 50 or more individuals. This term affects your ability to comply with federal and state regulations. Correctly applying the ongoing employee designation to those who may otherwise be considered alternative schedule employees gives you the ability to offer benefits without jeopardizing your qualified benefit plans. It also makes you a desirable employer in the eyes of potential and current employees, thereby increasing hiring and retention rates. 

What is the history of ongoing employees? 

With the 2010 enactment of the Affordable Care Act, full-time equivalent employees were redefined relative to employees who worked non-traditional schedules. Employees who worked longer schedules for two weeks but had two other weeks off per month were previously considered ineligible for benefits because they didn’t meet the FTE weekly hourly test. The passage of the ACA added the ongoing employee definition to the employer’s toolbox. Ongoing employees should not be confused with independently defined contractors or part-time employees. Independent contractors are not considered employees of the company, and part-time employees do not satisfy the monthly hours required to meet the definition of an ongoing employee. 

Summary 

An ALE company hires an ongoing employee to work a non-traditional schedule but who works at least 130 hours per month. After successfully completing a standard measurement period, this employee is benefits-eligible and is reviewed for eligibility annually.