Definitions

Important: It is highly recommended that you read this topic that contains the terminology used throughout this subject and the Affordable Care Act (ACA Affordable Care Act), in general.

The definitions are as follows:

Table 2-26: Definitions
Field	Description
Health Insurance Marketplace	Formerly known as the health care exchange, a provider to which small employers or individuals can go to purchase health care insurance. The Marketplace may be run by a state or federal government, a combination of both, or a private exchange.
employer shared responsibility	Starting in 2014, large employer s will be subject to the Employer Shared Responsibility provisions under section 4980H of the Internal Revenue Code (added to the Code by the Affordable Care Act). Under these provisions, if these employers do not offer affordable health coverage that provides a minimum level of coverage to their full-time employees, they may be subject to an Employer Shared Responsibility assessable payment if at least one of their full-time employees receives a premium tax credit for purchasing individual coverage on one of the new Health Insurance Marketplace .
Applicable Large Employer	According to the ACA, this is an employer that has at least 50 full-time and/or full-time equivalent employees. Note: If you do not meet the requirements to be called an Applicable Large Employer (ALE) in terms of the ACA, you are not subject to participate in the employer shared responsibility portion of the ACA.
large employer	According to the ACA, this is an employer that has at least 50 full-time and/or full-time equivalent employees. Note: If you do not meet the requirements to be called a large employer in terms of the ACA, you are not subject to participate in the employer shared responsibility portion of the ACA.
individual mandate	Every individual must have health insurance that meets minimum value standards.
full-time	Any employee that either averages30 hours per week or works more than130 hours per month.
part-time	Any employee that either averages less than30 hours of service per week or works less than130 hours per month.
variable hour	An employee that has a work schedule that varies week-to-week, such that the employer cannot reasonably determine whether the employee is either part-time or full-time .
seasonal	An employee that works additional hours for a short period of time, usually due to either tourist or holiday seasons in a seasonal industry per DOL 29CRF § 500.20(s)(1). For example: During the Christmas season, employees may work 40 hours or more per week; however, during the rest of the year, they work only 20 hours per week. Section 4980H provides that seasonal employees are employees who perform labor or services on a seasonal basis as defined by the Secretary of Labor, including: Seasonal workers, covered by 29CFR § 500.20(s)(1). Retail workers employed exclusively during holiday seasons.
full-time equivalent	A calculated value, determined by dividing the total number of hours each non-full-time employee (part-time , variable hour , and seasonal ) worked by 120. In determining FTEs, the maximum hours for each non-full-time employee shall be 120 hours.
FTE	Abbreviation for full-time equivalent .
assessable payment	The penalties that can be incurred under “pay or play.” For more information, see employer shared responsibility .
look back period	A period of time in the past that is used to analyze your work force.
minimum required value	The IRS Internal Revenue Service defines this as the value that provides minimum value by covering at least 60 percent of the total allowed cost of benefits that are expected to be incurred under the plan (also known as a “Bronze” plan). To determine whether your plan is of minimum value, consult with your health care coverage provider as to what your plan minimum value is.
affordable	Premium contributions made by the employee that do not exceed 9.5% of household income. Since most employers don't know an employee's household income, the IRS allows employers to use a "Safe Harbor" method of determining affordability by calculating the employee's premium contribution for employee only coverage to not exceed 9.5% of the employee's income. The most common method of determining the employee's income is using the employee's W-2 box 1 wages, or their rate of pay.
initial measurement period	For variable hour and seasonal employees, employers are permitted to determine whether the new employee is a full-time employee using an “initial measurement period” of between three and 12 months (as selected by the employer).
standard measurement period	The measurement period the employer chooses to apply to ongoing variable hour employees. An employer determines each variable hour employee’s full-time status by looking back at the standard measurement period (a defined time period of not less than three but not more than 12 consecutive calendar months, as chosen by the employer).
ongoing	In general, an employee who has been employed by the employer for at least one complete standard measurement period.
administrative period	An optional period of time less than 90 days that employers may use to identify and enroll newly eligible full-time employees in the company health care plan.
stability period	A period of time (following a measurement and administrative period) during which any employee who was deemed to be “full-time ” is eligible to enroll in any employer-sponsored health care coverage. Must be at least six consecutive calendar months that follow the measurement period. Cannot be shorter than the measurement period