A Job Change Inside the Period
A promotion to 40 hours does not make an employee found not full-time into a full-time employee until the stability period ends, and a cut to 15 hours does not remove a full-time employee.
The three things to know.
Status Holds
The classification from the measurement period governs the stability period, regardless of changes in hours, title or pay.
The Cost Side
A full-time employee whose hours fall stays covered through the stability period, which can mean offering coverage to someone working fewer hours.
Exceptions Are Narrow
Specific rules cover moves between methods and between categories. Outside those rules, status does not move mid-period.
Sources: 26 CFR § 54.4980H-3. General information, not legal advice.
A worked example.
A Promotion in the Middle of a Period
A part-time stocker found not full-time for a stability period running January to December is promoted to a 40-hour assistant manager role in May.
What the Rule Produces
For the employer mandate she stays classified as not full-time until December 31, then the next measurement result applies. The employer can still offer her coverage under the plan sooner if its eligibility terms allow.
Four steps to apply it.
1. Note the change
Record the date of the new role.
2. Check the stability period
Confirm the end date.
3. Review plan terms
See whether the plan allows earlier enrollment.
4. Re-measure
Apply the next cycle’s result.
Where it goes wrong. Assuming a promotion immediately creates a mandate obligation.
The questions that come up next.
Can we remove someone from coverage after a demotion?
Not without checking the plan terms and the stability period. For the mandate test, status holds, so ending an offer early can expose the employer to a payment.
What if they are promoted to full-time?
Their status changes at the end of the stability period, and the next measurement result decides.
Does it affect Marketplace subsidies?
An employee not offered coverage may be eligible for subsidies. The employer penalty depends on who was full-time under the measurement result.
What if she was full-time and is demoted?
Her status holds for the mandate through the stability period.
Do we need a new notice?
Your plan terms and any change in eligibility may require one. Ask counsel.
Plan-specific questions belong with ERISA counsel, and we will bring them in.
Related pages on the look-back method.
Moving Between Methods
When an employee moves from a look-back position to a monthly-method position, an employee in a full-time stability period stays full-time through its end.
The Part-Time Shortcut
If you have continuously offered minimum value coverage and an employee moves to a position expected to average under 30 hours, you may move that employee to monthly measurement from the first day of the fourth full month.
The Full Look-Back Guide
Every rule, example and source behind this page, in one place.
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