The Obama administration on Monday released its final guidance on how colleges and universities should calculate the hours of adjunct faculty and student workers under the Affordable Care Act (ACA).
The ACA requires employers with 50 or more employees to offer full-time workers affordable health insurance coverage or possibly face tax penalties. The law defines a “full-time employee” as one who works 30 or more hours per week.
The administration released initial guidance in 2013 on the ACA employer mandate, telling colleges and universities simply to use “reasonable” methods to count adjuncts’ hours. The final rule provides more specific parameters on that front, as well as on calculating the hours of student workers. ACE and the higher education association community raised both issues with the IRS during the past year (see here and here).
A brief overview of the final guidance:
- One “reasonable method” to calculate adjunct work is to say that for every hour spent teaching, instructors work an additional hour and 15 minutes outside the classroom grading papers and preparing for class.
- Required duties for adjuncts outside of the classroom, such as faculty meetings or office hours, may be credited as an hour of service per week for each hour spent on tasks.
- The guidance notes that “employers may credit more hours of service than would result under the method described in the preceding paragraph and also may offer coverage to additional employees beyond those identified as full-time employees under that method.”
- Institutions also may use other “reasonable methods” for crediting hours of service for adjunct faculty, given the "wide variation of work patterns, duties, and circumstances" at different colleges.
While the administration may consider further guidance on this issue, institutions may rely on this formula for calculating adjunct hours at least through the end of 2015.
- Service performed by students in positions subsidized through the federal Work-Study Program (or a similar state or other program) do not count as hours of service for ACA purposes. The exemption is limited to these programs, however, and “[a]ll other hours of service for which a student employee … is paid … are required to be counted as hours of service.”
- The guidance does not provide an exemption for graduate students functioning as research or teaching assistants, so institutions will have to carefully manage working hours to determine whether the assistantships qualify as full-time in accordance with the ACA.
- With respect to internships and externships, the guidance states that services by an intern or extern would not count as hours “to the extent that the student does not receive, and is not entitled to, payment in connection with those hours.” However, some paid interns or externs, particularly during a semester as well as the summer, may qualify for exemption as seasonal employees, and the guidance has a full section detailing how to determine whether an employee qualifies as seasonal. In addition, the potential application of the employer mandate to internships or externships will be delayed until 2016 for students working at mid-size firms (50 to 99 employees) and phased in during 2015 for larger employers (100 or more employees), so there will be time to fully assess the effect of this guidance.
(More) Clarity on Adjunct Hours
Inside Higher Ed
IRS Suggests 'Reasonable' Ways of Calculating Adjuncts' Hours
The Chronicle of Higher Education