Are Benefits for Interns Required?

Internships offer students terrific hands-on learning opportunities while opening future avenues for employment. They provide real-world experience for those at the beginning of their career path. For employers, working with interns can build their hiring pipeline while saving a little money on salaries. If your company is considering an internship program you may wonder if you need to provide benefits for interns.

In this article, we’ll take a look at factors that apply. They typically depend upon the size of a company and the specifics of its internship program.

Does the ACA require benefits for interns?

The Affordable Care Act (ACA) requires employers with 50 or more employees to provide healthcare benefits for full-time employees. A full-time employee is defined as working at least 30 hours per week (or 130 hours per month) over a given set period of time. However, the ACA doesn’t specifically mention interns in relation to this health insurance rule.

Generally, college students who become interns are not full-time employees and don’t receive the same benefits as their full-time counterparts. However, a paid intern may be considered full-time under Department of Labor and Internal Revenue Service rules, making them eligible for certain benefits.

Interns may be considered covered employees

Paid interns working more than 30 hours per week may be considered eligible employees who should receive health coverage insurance. Exceptions may include:

• Interns employed by a company for fewer than 120 days.
• Interns who have worked fewer than 30 hours a week on average for the last 12 months.

To make the determination, employers may use the look-back measurement method, which averages the hours worked over the last 12 months. It’s vital for employers who invest in hiring interns to research federal law, state law, and other provisions under the Fair Labor Standards Act (FLSA) regarding minimum wage, overtime, and hours worked. In many cases, the U.S. Department of Labor requires interns to be paid, so be sure to review agency guidelines.

Interns who are not considered covered employees

Interns who work fewer than 30 hours per week don’t have to be covered for healthcare. Companies aren’t required to cover unpaid interns, even those working more than 30 hours a week. Interns participating in federal work-study programs are also likely to be exempt from coverage requirements.

That said, employers may choose to cover part-time interns or seasonal employees at their discretion. Any policy established for an intern should apply equally to all interns hired during the same time.

Should employers provide other benefits for interns?

One question many employers often ask themselves is whether they should provide other benefits, aside from healthcare coverage, for interns. Perks they often consider include paid time off, paid sick leave, paid vacation time, lunch or transportation stipends, life insurance, extra professional development opportunities, wellness perks, and flexible work options, such as remote work.

Obviously, this is up to each individual employer’s discretion, but there are many good reasons to offer interns benefits.

Builds goodwill and pipelines

Interns who do a stint with a company may circle back to pursue future job offers. This can help companies build their pipelines with a steady stream of applicants already primed to work for the organization.

Enjoy new perspectives

Whether your company offers paid or unpaid internships, these up-and-coming professionals can provide insight to help your company stay current. It’s not uncommon for companies to become stagnant. Interns offer a fresh perspective and can help companies achieve future success in various ways.

Gain positive publicity

A company that invests in a paid intern, or even an unpaid one, increases its connections to higher education institutions. This improves its ability to recruit future employees. It can also provide companies with the ability to build their brand and reputation in a positive way since they demonstrate their commitment to investing in the next generation of employees.

Internship programs, structured properly, can be a win-win for both employer and employee.

Why students choose internships that don’t provide benefits

Making interns eligible for benefits will attract many candidates, but students also seek less tangible benefits. They may choose to be either a paid intern or an unpaid intern to:

• Gain valuable work experience.
• Grow their professional networks.
• Build a resume that will impress future employers.
• Earn a little money.

One of the biggest benefits associated with internships is the ability to explore certain fields without necessarily committing to them. Students without a declared major can try different types of employers to help them decide where to take their careers.

Final tip

There are many benefits associated with internship programs, but it’s vital to remain in compliance with federal and state laws. Always consult legal counsel to understand how these guidelines might apply to your current and future interns.

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Table of Contents

• ACA
• Interns May Be Considered Covered Employees
• Interns That Aren’t Considered Covered Employees
• Final Tip
• Helpful Links:

It depends on the size of your company, and specifics of the internship. Below is a guide to determining which benefits, if any, you need to provide your interns:

ACA

The Affordable Care Act (ACA) requires employers with 50 or more employees to provide healthcare benefits for covered employees, which are defined as employees working at least 30 hours per week over a given period of time.

However, the ACA doesn’t specifically mention interns in relation to this rule.

Interns May Be Considered Covered Employees

If a paid intern works more than 30 hours per week, they may be considered an eligible employee whom the company must cover.

Exceptions may include:

• Interns employed by a company for less than 120 days
• Interns who have worked less than 30 hours a week on average for the last 12 months. Employers may use the look back rules, which averages number of hours worked over the last 12 months

Interns That Aren’t Considered Covered Employees

• If an intern works fewer than 30 hours per week, they don’t have to be covered. Employers may choose to cover part-time interns at their discretion. However, any policy put in place for an intern should apply equally to all interns
• Companies aren’t required to cover unpaid interns, even those working more than 30 hours a week
• Interns participating in federal work-study programs are also likely to be exempt from coverage requirements

Final Tip

You should consult legal counsel to understand how these guidelines might apply to their interns.

Helpful Links:

Healthcare Coverage Under the Affordable Care Act – NaceWeb.org – Clarifies ACA healthcare stipulations and then relates them to interns.

Are Your Summer Interns ACA-Eligible – SHRM.org