26 CFR § 54.4980H-1
Section 54.4980H-1 is the definitions section for the employer mandate. It defines full-time employee, hour of service and the look-back periods that the other sections rely on.
What it says and why it matters.
The 30-Hour Definition
A full-time employee is one who averages at least 30 hours of service per week, or 130 hours of service in a calendar month, as the monthly equivalent.
The Look-Back Vocabulary
The section defines the administrative period, measurement period, stability period and initial measurement period, so each term has a fixed meaning for the rules in § 54.4980H-3.
Other Key Terms
Employee under the common-law standard, dependent, hour of service, seasonal employee and part-time employee, among others.
Primary source: 26 CFR § 54.4980H-1. General information, not legal advice.
A worked example.
Looking Up a Defined Term
An administrator is unsure whether a 70-day gap between measurement and stability counts as an administrative period.
What the Rule Produces
The definitions section defines the administrative period as a period of up to 90 days that follows measurement, so a 70-day gap qualifies, provided the periods are set consistently with the other rules.
Four steps to apply it.
1. Find the term
Search the definitions.
2. Read the definition
Note each element.
3. Apply it
Compare with your design.
4. Record it
Cite the section in your documentation.
Where it goes wrong. Relying on a plain-English summary of a defined term when the regulation’s wording differs.
The questions that come up next.
Why do definitions matter so much?
Because a payment turns on who is full-time and what counts as an hour. A different reading of a term can change a classification.
Does the section define seasonal employee?
Yes. It does so in the context of new-hire measurement. A separate seasonal-worker exception applies to large-employer status in § 54.4980H-2.
Where is the method itself?
In § 54.4980H-3, which sets out the monthly and look-back measurement methods.
Is there a definition of full-time employee?
Yes, at least 30 hours of service per week or 130 hours in a calendar month.
Is the section updated?
Check the current text before relying on it.
Plan-specific questions belong with ERISA counsel, and we will bring them in.
Related sources and guides.
26 CFR § 54.4980H-2
Section 54.
26 CFR § 54.4980H-3
Section 54.
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