Limited Non-Assessment Periods

There is a limited non-assessment period for first-time Applicable Large Employers (ALEs), which means that during this period an ALE Member will not be subject to a penalty for failing to offer coverage to a full-time employee. This period is January through March of the first calendar year in which an employer is an ALE, but only for an employee who was not offered health coverage by the employer at any point during the prior calendar year.

For example, if 2019 was the first calendar year in which a company was an ALE, then their limited non-assessment period is January through the end of March 2019. During this three-month period, this first-time ALE will not be penalized for failing to offer coverage to an eligible employee, but only if that employee was not offered health coverage by the employer at any point during 2019.

In addition, January through the end of March 2019 only counts as a limited non-assessment period if the employer offers the employee minimum value health coverage by the first day of the first month following the end of the period.

There is a limited non-assessment period for new hires, if the employee’s first day of employment is a day other than the first day of the calendar month. This period is the employee’s first calendar month of employment. During this limited non-assessment period, an ALE Member will not be subject to a penalty for failing to offer coverage to a full-time employee.

For example, if an employee started work on March 3, then their limited non-assessment period is March 1 through March 31. During this calendar month, the Applicable Large Employer (ALE) will not be penalized for failing to offer coverage, and would not be required to offer coverage until April 1.

However, if the employee's start date was on March 1, there would be no limited non-assessment period.

There is a limited non-assessment period if an Applicable Large Employer (ALE) is using the look-back measurement method, and the employee is reasonably expected to be a full-time employee at his or her start date. This period coincides with the employee's waiting period, which begins on the employee's start date. This period cannot be longer than three months after the employee's start date, regardless of how long the employee's waiting period is.

When an ALE brings on a full-time new hire, the Zenefits ACA Compliance app assumes the employee will work at least 130 hours per month. Once the employee's waiting period is over, the ALE is required to offer coverage.

In addition, the employee's waiting period only counts as a limited non-assessment period if the employer offers the employee minimum value health coverage by the first day of the first month following the end of the period.

There is a limited non-assessment period if an Applicable Large Employer (ALE) is using the look-back measurement method, and the employee is a variable hour employee, seasonal employee or part-time employee. This period covers the initial measurement period for that employee and the administrative period immediately following the end of that initial measurement period. During this limited non-assessment period, an ALE Member will not be subject to a penalty for failing to offer coverage to an employee.

In addition, the employee's waiting period only counts as a limited non-assessment period if the employer offers the employee minimum value health coverage by the first day of the first month following the end of the period.

There is a limited non-assessment period if an Applicable Large Employer (ALE) is using the look-back measurement method, and the employee is a variable hour employee, seasonal employee or part-time employee, and the employee switches to a full-time employee during their initial measurement period. This period begins on the date that the employee's status changed to full-time, and ends either: (1) once the employee's waiting period is over, or (2) once the initial stability period begins, whichever comes first. In any event, this limited non-assessment period cannot be longer than three months after the employee's switch from part-time to full-time.

In addition, this period only counts as a limited non-assessment period if the employer offers the employee minimum value health coverage by the first day of the first month following the end of the period.

If an ALE Member is using the monthly measurement method to determine whether an employee is a full-time employee, the period beginning with the first full calendar month in which the employee is first otherwise (but for completion of the waiting period) eligible for an offer of health coverage and ending no later than two full calendar months after the end of that first calendar month.

In addition, this period only counts as a limited non-assessment period if the employer offers the employee minimum value health coverage by the first day of the first month following the end of the period.

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