Q: We have employees who are not paid over summer break and who are not actively working with us during that time. If they work on average less than 30 hours per week because of the break, do we have to offer them health insurance?
A: It’s not that simple. Schools have special rules for counting employee hours during school breaks. You must “neutralize” the effect of the employment break so as not to penalize the employee. There are two ways to neutralize the break.
- Schools can determine the employee’s average hours by excluding any employment break period occurring during the measurement period and applying that average for the entire measurement period.
- If you have a two-month break you would use 10 months rather than 12 months for determining the average.
- Schools can impute the hours of service for the employment break period at a rate equal to the average weekly hours of service for the weeks that are not part of the break.
- If the employee works on average 32 hours per week when school is in session, then you would consider that they work 32 hours per week during the break.
You can find the Rules in Treasury Regulation §54.4980H-3(d)(6)(ii)(B).
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