How Many Hours Can Seasonal Employees Work Before Needing Insurance Coverage?

May 13, 2016・3 mins read
SHARE
How Many Hours Can Seasonal Employees Work Before Needing Insurance Coverage?

Table of contents

  • 1.Dear S.H.E.I.L.A.
  • 2.Got a question about benefits and insurance?

Hey Bud, We employ a lot of college students and almost all of them want to work full-time hours over the summer. We need the help and are willing to let them, but how long are we allowed to have them do that before we legally have to offer them insurance? I've heard that we can let them do it for 90 days and then have to either offer them insurance or cut their hours back to part time. What would you suggest we do? Thanks, Seasonal Hours Employees Insurance & Labor Apprehension

Dear S.H.E.I.L.A.

, Those are all very good questions which are being asked by a number of people. With summer coming up, lots more employers are probably having the same kinds of questions about seasonal employees. So, let’s dive in and come up with some answers to help guide our hiring practices, and at the same time keep us out of reach of Affordable Care Act (ACA) penalties. First, some definitions to set the stage. A “seasonal employee” is defined as an employee who is hired into a position for which the customary duration of the job is expected to be six months or less. An example of the term customary refers to an employee hired around the same time each year for a specific time-dependent purpose like a produce harvester. This qualifying becomes particularly important if the employer doing the hiring is an “applicable large employer”, or “ALE”, or per the ACA. ALEs can treat seasonal employees differently than full-time non-seasonal employees in that the ALE does not have to offer the seasonal employee medical benefits. A caution though: misclassifying seasonal versus non-seasonal can result in significant penalties for the employer. Employers can check the rules in the Employer Shared Responsibility rules set forth in the ACA. Here seasonal employees are distinguished from seasonal workers. A “seasonal worker” is an employee that has worked no more than 120 days or four months during the prior year. This worker category is used in the ALE’s calculation as to whether or not the company is a large employer and subject to large employer rules under the ACA. So, to revisit your question: Yes, you can hire college students to work full-time over the summer so long as you include them in your calculations as an Applicable Large Employer. Once they work in excess of 130 hours per month for four months or more during the calendar year, they are no longer considered seasonal and you are required to provide them benefits on the same basis as your “full-time” non-seasonal employees. If you keep their hours less than 130 hours per month, then they remain “part-time”.

Got a question about benefits and insurance?

This communication is for informational purposes only; it is not legal, tax or accounting advice; and is not an offer to sell, buy or procure insurance.

This article may contain hyperlinks to websites operated by parties other than TriNet. Such hyperlinks are provided for reference only. TriNet does not control such web sites and is not responsible for their content. Inclusion of such hyperlinks on TriNet.com does not necessarily imply any endorsement of the material on such websites or association with their operators.

Bud Bowlin

Bud Bowlin

Bud Bowlin ran his own benefits agency for over 15 years and was regional manager at Rogers Benefit Group for over 20 years. Combined with time in the military and law enforcement, Bud has an expan...

Table of contents

  • 1.Dear S.H.E.I.L.A.
  • 2.Got a question about benefits and insurance?
esac.png
ESAC Accreditation
We comply with all ESAC standards and maintain ESAC accreditation since 1995.
logo_irs.png
Certified PEO
A TriNet subsidiary is classified as a Certified Professional Employer Organization by the IRS.