Affordable Care Act - Glossary

Term Definition
APPLICABLE LARGE EMPLOYER (ALE) An employer's size is determined by the number of its employees. Generally; an employer with 50 or more full-time employees or equivalents will be considered an APPLICABLE LARGE EMPLOYER.
NOTICE OF EXCHANGE Employers must inform all current employees and any new hires after this date about the existence of the exchange in their state and how employees can access it. The notification must include (1) Written notice informing employees about the State's Exchange (2) Notification to employees if the plan offered by the employer is inadequate, meaning it does not meet the actuarial value of percent (3) Notification to employees that if they purchase a health plan through the Exchange, the employee may lose the employer's contribution to health benefits offered by the employer
QUALIFIED HEALTH PLAN The medical plans offered to employees must be guaranteed issue, follow the ACA's cost-sharing guidelines, and cover "essential health benefits" with no lifetime or annual maximums
RULE OF PARITY The "Rule of Parity," allows an employer to ignore certain employee's prior hours of service. In general, if an employee has had no service for a period of several weeks (e.g., an 8 week break) and only provided services for lesser time immediately before then (e.g., the employee worked for 7 weeks), then the prior service (e.g., 7 weeks) is ignored. The employee is then treated as a "new" employee rather than a "continuing" employee. Note that the maximum number of weeks which can be considered is generally 13 weeks (26 weeks for an educational organization).
FULL-TIME EMPLOYEE Position is defined as full-time with the expectation that employee will work an average of 30 or more hours per week.
PART-TIME EMPLOYEE Position is defined as not full-time with the expectation that employee will always work less than 30 hours per week and is not a variable hour or seasonal employee.
SEASONAL EMPLOYEE Position occurs during the same season each year and is 6 months or less in duration. Positions determined to be seasonal can be subject to a look-back measurement period if applicable.
VARIABLE HOUR EMPLOYEE Employer cannot determine if position is "reasonably expected" to average 30 or more hours per week and can utilize a safe harbor look-back measurement period to determine if employee is full-time.
STANDARD MEASUREMENT PERIOD Time period of between 3 & 12 consecutive months where employer tracks on-going employee's hours of service and determines if employees works an average of 30 hours per week and are considered full-time. (Employer uses "Initial Measurement Period" for new employees)
ADMINISTRATIVE PERIOD Optional time period between Measurement and Stability periods to calculate full-time status, communicate status to employee and conduct open enrollment. (The combined length of Initial Measurement Period + Administrative period for New Employees, determined to be full-time, cannot exceed the first of the month following new employee's one-year anniversary from hire date)
STABILITY PERIOD Time period of not less than 6 months that employees determined to be full-time during the Standard measurement period are offered full-time coverage. Stability period can correspond to the plan year or to another time period as defined by employer.
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