Does the Affordable Care Act (ACA) Apply to Summer Interns?
The ACA rules for employers with 50 or more employees are pretty clear-cut. However, they are slightly less simple when it comes to summer interns. Do you have to offer them insurance?
It is essential to know that the Affordable Care Act defines full-time employees as someone working 30 hours or more a week, and summer interns are no exception.
It is important that HR administrators start thinking of summer interns who work more than 30 hours a week as regular employees when it comes to benefits. A key point to remember with summer interns, is that even though they may not need insurance, coverage must be offered and forms 1095 and 1094 filed if they are full-time or consistently work 30 hours or more.
The good news though, is that many students up to the age of 26 may not even need employer provided health insurance since the ACA allows them to obtain year-round coverage from either their university or parent’s plans. Also, in general, internships are short, temporary stints of 3 to 4 months. Therefore, eligible interns could only receive short-term health coverage.
Another point to remember is that if you classify your interns as seasonal workers, ACA allows them to be placed into a measurement period. So even if they work more than 30 hours in one week, but don’t average 30 hours per week over the measurement period, they’re not full time equivalent. Seasonal workers are defined by the Department of Labor definition.
The Society for Human Resource Management also recommends the following best practices:
- If you intend to define interns as seasonal employees, clearly state that in their offer letters and make sure that their actual employment follows suit.
- Work closely with your broker and legal counsel to ensure internships are compliant. The ACA regulations around benefits eligibility are complex and amendments are still being issued, so it’s important to have expert counsel in making sure that your company’s HR practices are on point.
- Monitor the work and hours of interns closely and remember that they should not be considered a long-term substitute for hiring regular employees.