Hours of Service Report

The Hours of Service report can be used as a tool for complying with the Affordable Care Act.   Use this report to determine employee eligibility for insurance offerings and as part of your audit trail to prove compliance. The report can be run for various time spans, up to twelve months, depending on the ACA measurement period needed.  You can select individual employees or view the report for different work-hours classifications.

Use the Hours of Service report to determine:

• the number of full-time and full-time equivalent employees
• whether employees should be classified as full-time or part-time for the various measurement periods as required by ACA
• if the employer is a "large" employer and therefore subject to ACA regulations
• employee eligibility for insurance offering during a certain time frame

Section 1 – Employee Hours

Section 1 shows each of the selected employees’ actual “hours of service” for each calendar month using the Monthly Measurement Method as well as their classification with respect to full-time/part-time. For employees on weekly or biweekly payroll, the total hours-of-service for each calendar month is calculated using the weekly rule. (Reference §54.4980H-3 Determining full-time employees)

• You can examine this information for accuracy and make corrections using Employee Adjustments.
• If an employee is classified as ‘Variable’ but has worked for the full initial measurement period, then that employee’s work/hour classification should be changed to part-time or full-time.
• For audit purposes, you can run the report for full-time and part-time employees only.  (Variable employees generally aren’t counted for most measurement periods.)
• The Look-back measurement for FT employees total shows the number of employees who would be qualified as full-time for the selected period. This measurement can be used for setting a Stability Period which designates an employee's full-time status for determining liability with respect to the Employer Shared Responsibility provision.

Section 2 – Full-Time Equivalent hours

The second section uses the information from Section 1 to determine if an employer is an Applicable Large Employer (ALE). The total number of employees is calculated. This total determines if an employer is a "large" or ALE employer and therefore subject to ACA regulations. The number of employees is calculated by adding the full-time (FT) and full-time equivalent (FTE) employees.

Full-time equivalent employees are counted by adding the hours worked per month of part-time employees, capped at 120 hours per month and divided by 120.

For each month, the FTEs are added to the full-time employees from Section 1 to provide the total employees for the month. The average is calculated. If the report is run for a calendar year, then this average is the number used to determine if an employer is an ALE employer.

(Reference §54.4980H-2 Applicable large employer Calculating the number of FTEs.)

After viewing the report, if you wish to make corrections to an employee's hours of service, modifications to employee hours can be made in Employee Adjustments.