Denver Staffing Agency – The Affordable Care Act “Look-Back” Defined August 2012 - Part 2

  • Posted by: J. Kent Gervasini |
  • 9/23/12 |
  • 12:03 AM
Denver Staffing Agency – The Affordable Care Act “Look-Back” Defined August 2012 - Part 2

On August 2, 2012, J. Kent Staffing, a Denver based temporary and contingent staffing agency, published its Part 1 of its Employer Headlines on Obamacare, “Supreme Court Upholds Obamacare—Next Steps for Staffing Firms." At the time our article was posted, the Obama administration still had not released the important official guidance clarifying the definition of full-time employee under the Affordable Care Act and “look-back proposal.”  That official guidance, Notice 2012-58, was finally released on Friday, August 31, 2012

Why is the Full-Time Employee Definition & Look-Back Proposal Important?
The Obama administration’s issued guidance (Notice 2012-58) is designed to assist employers (50 or more employees) who fall under the Patient and Protection Affordable Care Act effective Jan.1, 2014, to identify their full-time employees for purposes of:

  • Either offering health coverage or
  • Paying penalties

“Look-Back” Defined - A 12-Month Measurement Period
The centerpiece of the guidance is a "look-back" or stability period safe harbor, which the American Staffing Association (ASA) and its allies have been advocating for more than a year. The guidance will allow Denver employers to select up to a:

12-month measurement period (look back) for both "ongoing" and new "variable hour employees" to determine whether they are full-time employees.

New Variable Hour Employee – Defined by Notice 2012-58
ASA believes that the definition of variable hour employee will cover the great majority of temporary employees employed by staffing firms. Under Notice 2012--58, a new variable hour employee is defined as an individual who, based on the facts and circumstances on the individual’s start date:

  1. the employer cannot reasonably determine will work full-time (i.e., average of at least 30 hours per week) or,
  2. if the employee is expected to work full-time initially, whose period of full-time employment is expected to be of limited duration and
  3. the employer cannot reasonably determine that the employee will work full-time over the course of the measurement period.

The Guidance - Encourage Large Employers to Provide Affordable Health Plans
This guidance is intended to encourage “applicable large employers” (generally, employers who employ at least 50 full-time equivalent employees) to continue providing and potentially to expand group health plan coverage for their employees by permitting employers to adopt reasonable procedures to determine which employees are full-time employees without becoming liable for a payment, to protect employees from unnecessary cost, confusion, and disruption of coverage, and to minimize administrative burdens on the Affordable Insurance Exchanges (Exchanges).

In addition, Notice 2012-58 makes it clear that employees who do not meet the definition of full-time employee may apply for and receive premium assistance on a state exchange during any period when coverage is not offered under their employer’s plan.

Guidance Invites Comments – Additional Rules for the Staffing Industry?
The guidance issued on August 31, 2012 is not the last word on the subject. ASA plans to meet with administration officials in the near future to discuss whether additional rules would be appropriate for the staffing industry. Formal proposed regulations will be issued for public comment at some future date yet to be determined. But the administration says employers can rely on the guidance at least through 2014. The guidance invites comments on whether other safe harbor methods should be available to employers to determine the full-time status of:

  • temporary staffing employees
  • short-term assignment employees
  • employees hired into high turnover positions
  • other categories of employees that may present special issues

Read More
A copy of the look-back/stability period safe harbor guidance is available at On that site, you can also find separate guidance explaining how the look-back rules coordinate with the 90-day waiting period provisions of the law.


 Would You Like More Information About
Obamacare: The Affordable Care Act?

Supreme Court Upholds Obamacare—
Next Steps for Staffing Firms - Part 1

The Affordable Care Act - Waiting
Period Defined - Part 3

ACA 12-Month "Look-Back" Period Begins Jan. 1, 2013 - Part 4

The information in the article above is intended for general education purposes only and should not be relied upon as a substitute for professional, legal, and/or accounting advice.

Sources:  American Staffing Association,

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