Affordable Care Act: Rehire Rules

Posted by The Propel HR ACA Team on 9/8/16 9:30 AM
The Propel HR ACA Team
Posted on: September 8, 2016

The ACA’s rehiring rules prevent employers from avoiding the need to provide health insurance coverage to employees who they terminate and rehire multiple times.

The final IRS regulations provide that:

  • An employer can treat a rehired employee as a new employee under the ACA if the ‎employee did not have an hour of service for at least 13 consecutive ‎weeks before the employee returned to work.
  • BUT, an employer may treat an employee as rehired after a shorter period of at least four consecutive weeks during which no hours of service were credited if that period exceeds the number of weeks of that the employee originally worked for the employer.

For example:

  • If an employee started employment and worked for six weeks, then had a period of eight weeks during which no hours of service were credited, the employer could treat the employee as a rehired employee if the employee resumed providing services after the eight-week break.
  • If an employee started employment and worked for two years, then had a period of twelve weeks during which no hours of service were credited, the employer would not be able to treat the employee as a rehired employee if the employee resumed work but instead as an employee with a leave of twelve weeks. But, if that employee had a period of fourteen weeks during which no hours of service were credited, the employer could then treat the employee as a rehired employee if the employee resumed work.

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More information about rehire rules and break-in-service rules can be found in the final IRS regulations published in the Federal Register on February 12, 2014

 

Topics: Featured, Regulations, ACA

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