The Affordable Care Act defines employer-provided coverage “affordability” as coverage that costs no more than 9.5 percent of employee earnings, but it has remained unclear how to handle variable-hour employees’ eligibility who are eligible for coverage during the stability period.
Though some assumed the 9.5 percent would apply to earnings during the look back period, so if actual earnings decrease payroll deductions could remain the same, the NRA’s experts reply this is not the case.
According to the NRA, the same test of employer affordability applies during the stability period to both variable- and non-variable-hour employees. So maximum payroll deductions are based on actual employee earnings, which can be found in Box 1 of the W-2, and what was deducted when the employee was covered during the stability period.
Have a health care question? Ask it now, and the CRA contact you with the resources you need.