Ask a Zenefits Advisor: Does a Change From Part-Time to Full-Time Affect Health Insurance Eligibility?
You may change an employee from part-time to full-time status. Here’s what you need to know about lookback periods and health insurance eligibility.
Hey there Bud,
We initially hired an employee as part time and then, after six months, moved her into a full-time position. Is the employee eligible for insurance after the 60-day assessment period? Or does she have to wait until our 12-month lookback period (which happens to also be our Open Enrollment date)? Also, if an employee quits and comes back after less than a month, are they hired on as a new employee and their 60-day assessment period starts over?
Thoughts About Employee Status Holding Attention
You have an existing employee who you promoted to full-time employment. Obviously you saw the need for this person to be working in an expanded capacity, and you expect her to be in this role for the foreseeable future. Once you determine a date for which full-time status begins, then the employee is eligible for all benefits that full-time employees regularly receive. At this point, you allow the new full-time employee to enroll in benefits and begin the waiting period or assessment period. Once that waiting period is met, benefits begin.
Your employee doesn’t have to wait for the lookback period for a couple of reasons. The lookback period is a compliance check to make sure that no part-time employees are working, or have worked, in excess of the requirement that qualifies them for benefits. Since you’ve determined that the employee’s role has changed and is going to be full-time going forward, the issue of using the lookback period is moot.
As we know from previous columns, if an employee at an applicable large employer works in excess of 130 hours per month for more than half of the lookback period, then that employee is eligible for benefits and must be offered benefits during the next Open Enrollment.
As to your second question concerning whether an employee is subject to a new waiting period or 60 day assessment period, that question is not part of the ACA. Rather, how the company wishes to handle it is determined by contract and group policy. In other words, your group must decide if you want the rehired employee to have a waiting period or not. Your decision should be part of your company policy manual and be spelled out clearly. It’s been my experience that most companies set a time limit for rehire (say six months to one year) and waive the waiting period for those employees rehired within six months following the term date. This works particularly well in industries subject to periodic shutdowns.
Hope these answers help you in your duties.
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