Administrative Period
The administrative period is an optional gap of up to 90 days between measurement and stability. It gives you time to total hours, notify employees and enroll them.
The three things to know.
What It Is For
Time to pull hours, classify each employee, send notices and process enrollment before the stability period begins.
It Must Not Create a Gap
For ongoing employees the administrative period overlaps the prior stability period, so people already covered stay covered while the new results are processed.
Limits
It cannot exceed 90 days and cannot lengthen or shorten the measurement or stability period. For new hires the 90 days include time between the start date and the start of the initial measurement period.
Sources: 26 CFR § 54.4980H-3. General information, not legal advice.
A worked example.
Notices and Enrollment
A measurement period ends October 14. HR totals hours by October 31, sends notices in November and holds open enrollment through December 15.
What the Rule Produces
The administrative period runs from October 15 through December 31, about 78 days, inside the 90-day limit. Employees covered under the prior stability period stay covered throughout, and the new results take effect on January 1.
Four steps to apply it.
1. Total hours
Close the window and total each employee’s hours.
2. Classify
Mark each employee full-time or not.
3. Notify
Send results and offers.
4. Enroll
Process elections before the stability period begins.
Where it goes wrong. Running past 90 days because hours data arrived late.
The questions that come up next.
Is the administrative period required?
No. It is optional. It is useful because enrollment cannot start until hours are totaled.
Does coverage stop during it?
It should not. For ongoing employees, coverage under the prior stability period continues through the administrative period.
Can it be shorter than 90 days?
Yes. Many employers use a period sized to their open enrollment and payroll calendar.
What if enrollment is not finished in time?
The administrative period cannot be extended past 90 days. Plan the calendar so elections close before it ends.
Does the period apply to new hires?
New hires have their own limits, and the 90 days include the time before their initial measurement period begins.
Plan-specific questions belong with ERISA counsel, and we will bring them in.
Related pages on the look-back method.
Stability Period
The stability period is the time during which an employee’s status from the measurement period is held.
Expected Full-Time
If you reasonably expect a new hire to work 30 hours a week or more, you cannot use an initial measurement period.
The Full Look-Back Guide
Every rule, example and source behind this page, in one place.
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