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The Employer Mandate regulations refer to seasonal employees and seasonal workers, and yes, there is a difference. Let’s break this down as simply as possible by starting with a few refresher points.
A seasonal employee is an employee who is hired into a position for which the “customary” annual employment is six months or less. The reference to the term customary means the seasonal employees normally work around the same time each calendar year, such as during summer months or the holiday season.
An ALE does not have to offer coverage to seasonal employees even if they are expected to work full-time hours during their seasonal employment. However, seasonal employees should be placed in an initial measurement period where the ALE tracks the hours of service provided and the duration of employment. If it turns out some of these employees were full-time and non-seasonal (for example, they continued to be employed beyond six months), then health insurance should be offered to these employees during the stability period that follows the initial measurement period, or the ALE risks penalties.
For more information on measurement periods and stability periods, click here.
A seasonal worker is an employee who was employed for no more than four months (or 120 days) during the previous calendar year. The reference to a seasonal worker matters when determining ALE status. An employer will not be considered an ALE if they average 50 or more employees because of employing seasonal workers.
Think of a retail company who has 40 employees on staff during the months of January through October. Then during the holiday season, they hire seasonal help and have 200 employees on staff for November and December. This company would have an average of 66.67 employees, but they wouldn’t be considered an ALE due to the seasonal worker exception.
