For Applicable Large Employers (ALEs), choosing a measurement method with which to determine full-time (30 hour) status is necessary for completion of the 1094-C and 1095-C forms to satisfy the Section 6056 reporting requirement. Final regulations provide two methods for determining full-time employee status – the monthly measurement method and the look-back measurement method. These methods provide minimum standards for identifying employees as full-time employees.

The look-back measurement method involves:

• A measurement period for counting hours of service (called a standard measurement period or an initial measurement period);
• A stability period when coverage may need to be provided depending on an employee’s full-time status; and
• An administrative period that allows time for enrollment and disenrollment.

An employer has discretion in deciding how long these periods will last, subject to specified IRS parameters.

The monthly measurement method must be used to identify full-time employees by all ALEs electing not to use the look-back measurement method. The monthly measurement method involves a month-to-month analysis where full-time employees are identified based on their hours of service for each calendar month. This method is not based on averaging hours of service over a prior measurement period.

Deciding which measurement method to use is specific to each employer, and takes into consideration the employer’s industry, turnover rate, and employee classifications as full time, part time, seasonal or variable hour. Contact your NEEBCo representative for assistance in determining which measurement method is best for you.