Monthly Measurement Method
The monthly measurement method decides full-time status month by month from hours of service in that month. It is simple when schedules are stable and demanding when they are not.
The three things to know.
How It Works
Each calendar month stands alone. An employee with at least 130 hours of service is full-time for that month, and the employer is measured on whether it offered coverage for each such month.
Where It Fits
Employers whose people work steady, predictable schedules, or whose hours rarely cross the 30-hour line, usually find monthly measurement easy to run.
Where It Strains
When hours swing, an employee can be full-time in March and not in April. Offers and terminations then have to follow, and the administrative load grows.
Sources: 26 CFR § 54.4980H-3. General information, not legal advice.
A worked example.
A Month With 134 Hours
A technician averages 28 hours a week for most of the year, but in March a project pushes her to 134 hours of service in the month.
What the Rule Produces
Under monthly measurement March is a full-time month, so coverage should be offered for March, and she is reviewed again in April. Under a look-back design the March spike would be averaged into the window instead.
Four steps to apply it.
1. Count each month
Total hours of service for every employee at month end.
2. Compare with 130
Mark employees at or above the line as full-time for that month.
3. Track offers
Confirm an offer is in place for every full-time month.
4. Report by month
Carry the monthly status into the forms.
Where it goes wrong. Letting a short spike pass unnoticed. Under monthly measurement one busy month can create an offer obligation.
The questions that come up next.
Can we use the weekly rule?
Yes. The regulations allow an optional weekly rule under which some months are measured over four weeks and others over five.
Is monthly measurement the default?
It is one of the two available methods. Employers may choose either, and may use different methods for different categories of employees.
Can we switch from monthly to look-back later?
Yes, with the transition rules in the regulation. Plan the change around a plan-year boundary and document it.
Can we use the weekly rule?
Yes. It is an optional rule that measures some months over four weeks and others over five.
Is monthly easier for small teams?
Often, when schedules are steady and few people hover near the line.
Plan-specific questions belong with ERISA counsel, and we will bring them in.
Related pages on the look-back method.
Look-Back Measurement Method
The look-back measurement method averages hours over a measurement period you choose, then locks the result for a stability period.
Measurement Period
The measurement period is the window of three to twelve months over which you average each employee’s hours.
The Full Look-Back Guide
Every rule, example and source behind this page, in one place.
Talk it through with someone who runs this every year.
We help you choose the design, document it and reconcile the hours before the numbers reach your reporting.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
Switch to CFH. Unhappy with your broker? Your employees won’t notice. You will. →
Cookies on This Site
We use cookies to keep the site working properly and to understand how it is used. You can decline anything that is not essential. See our Privacy Policy for the detail.
- Essential — needed for the site to load and for you to move around it. These cannot be switched off.
- Analytics — tell us which pages get read, so we know what is worth writing more of.
- Advertising — set by third parties such as ad and social platforms to measure and target campaigns.