On the Settings tab, you can click the Create Period button to create the measurement period to determine eligibility.
The Measurement Periods purpose is twofold, designed to both protect the employee and the employer. The methodology behind the Measurement Period is to use a pre-negotiated period of time (employers choice) to gauge an employees hours of service, allowing the employer to determine if an employee is considered a Full Time Equivalent under the ACA. Once the employee(s) Measurement Period expires, the employer will have another predetermined period of time to calculate the employees hours and offer them coverage if the employee averages 30 hours per week or more, this period is called the Administrative Period. Once an employee's hours of service have been calculated, and they have been labeled as a Full Time Equivalent or will remain not Full Time, the employee will enter the final period. This last phase is the Stability Period, which is a period of time that either (a) the employee is guaranteed medical coverage or (b) the employer is not required to offer the employee coverage for the entire duration.
The image below displays a snapshot of an employers measurement period settings.
The example below shows how the Measurement Period, Administrative Period and the Stability Period work in conjunction - year over year. A few pieces to note are; the Stability Period must be at least 6 months and cannot be less than the Measurement Period. Although employers have an option to use a maximum 90 day Administrative Period, the sum of the Administrative Period and the Measurement Period may not exceed 13 months and a partial month - meaning if an employer elects to use a 12 month measurement period, they cannot use the full 90 day administrative period.
This example is used to illustrate both how the Measurement settings apply, and how an employer can match their Stability Period with their medical plan year. First of all, we have a few assumptions, (1) the employer has a Jan 1 - Dec 31 plan year, (2) the employer has elected to use a 12 month; remember that the Stability Period cannot be less than the Measurement Period, so the employer will have this period set to 12 months.
Assuming the employer wants to match their Stability Period to their plan year, we will need to offset our Measurement Period start date (i.e. not starting Jan 1). In order to execute this plan, we will start our Measurement Period on 10/10/2015 (12 months) meaning it will end on 10/9/2016. The next piece will be the Administrative Period, which in this case we want to fall close to or during open enrollment, and end on 12/31/2016. To ensure our Administrative Period ends on 12/31, we will set that period to 52 days (10/9 - 12/31). Now that we have the Administrative Period set to end on 12/31, our Stability Period will begin on 1/1, matching our plan year.
The measurement period can be three to twelve months with a subsequent stability period that generally cannot be shorter than six months.
An administrative period can be scheduled at the end of the measurement period, to allow processing of the measurement period numbers and offer coverage to full time employees.