Definition of Ongoing Employee
An ongoing employee is also referred to as a “continuing employee.” The ongoing employee is a non-contract individual employed by an applicable large employer (ALE). After completing one employment measurement period, during which it’s been determined that the person works at least 130 hours per month, benefits eligibility is determined as defined by the affordable care act (ACA).
What is an ongoing employee?
Ongoing employees are people who typically work non-traditional schedules for an ALE. Even so, they may still meet the general definition of an FTE (full-time equivalent) employee by working at least 130 hours per month.
New hires are not considered to be part of the ongoing employee definition. This is because they have not completed the associated mandatory employment measurement period.
Why is understanding ongoing employees important to my business?
Understanding the ongoing employee term is critical if your business qualifies as an applicable large employer (ALE). ALEs employ 50 or more individuals. This term affects your ability to comply with federal and state regulations.
Even as important, correctly applying the ongoing employee designation to those who may otherwise be considered an alternative schedule employee provides you the ability to offer benefits without jeopardizing your qualified benefit plans. It also makes you a desirable employer in the eyes of potential and current employees, thereby increasing hiring and retention rates.
What is the history of ongoing employees?
With the 2010 enactment of the Affordable Care Act, full-time equivalent employees were redefined relative to employees who worked non-traditional schedules. Employees who worked longer schedules for 2 weeks but had 2 other weeks off per month were previously considered ineligible for benefits because they didn’t meet the FTE weekly hourly test.
The passage of the ACA added a definition to the employer’s toolbox of terms that included ongoing employees.
Ongoing employees should not be confused with either traditionally defined independent contractors or part-time employees. Independent contractors are not considered employees of the company. Additionally, part-time employees do not satisfy the monthly hours required to meet the definition of an ongoing employee.
Other terms similar to ongoing employee that can assist you
- Affordable Care Act (ACA): Comprehensive health care reform law enacted in March 2010 intended to make affordable health insurance available to more people.
- Applicable large employer (ALE): A company with 50 or more full-time equivalent employees.
- Full-time Equivalent (FTE): An employee that meets the company’s definition of working full-time. For some companies, it’s 40 hours; for others, it’s 30.
- Measurement period: A 3-12 consecutive months Stability Period The longer of 6 months or the standard measurement period length (12 months) to determine an average number of work hours to evaluate eligibility for benefits offerings under plan document requirements. Per the ACA, during this period, it is determined that an employee works at least 130 hours per month instead of looking for at least 30 hours per week.
Summary of ongoing employee
An ALE company hires an ongoing employee to work a non-traditional schedule but works at least 130 hours per month. After successfully completing a standard measurement period, this employee is benefits-eligible but is reviewed for eligibility annually.
Similar glossary definitions you must know
- Independent contractor: A self-employed individual. The contractor’s client (or the payer) has the right to control and direct only the result of the work. They cannot direct what will be done or how it will be done.
- Defined (qualified) benefit plan: A defined benefit plan is a qualified employer-sponsored retirement plan that provides a fixed monthly amount at retirement.
- Employee benefits: Employee benefits are perks provided to employees in addition to their regular wages or salary.
- Part-time employee: Any employee that does not satisfy the employer’s definition of a full-time equivalent employee.
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