Employer Shared Responsibility Guidelines for Administrators

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Overview

Under the Employer Shared Responsibility (ESR) provision of the Affordable Care Act, as of January 1, 2016, the university expanded coverage for medical benefits to all non-seasonal employees that work 30 or more hours per week, whether in temporary or regular positions.

Under the expansion of coverage, units are required to affirmatively report any new full time temporary hires using the ESR eligibility certification form (updated on June 12, 2018) but do not have to track or report other types of hires or employee schedules. (A full time temporary employee is hired to work at least 30 hours per week as defined by the facts and circumstances of the position.) Other employees may be identified as eligible and offered coverage based on tracking of hours worked. All eligible employees will be notified at their University of Michigan email address and receive information on how to enroll.

Training for Administrators

Watch a video of the presentation or download the presentation slides.

Medical Benefits Eligibility as of January 1, 2016

There are different ways that an employee could potentially meet the 30 hour per week threshold to become eligible for medical benefits under the expansion of coverage. See ESR definitions for additional information.

Medical Benefits Eligibility for New Hires Under ESR
Work schedule Type of position How many hours worked? Over what period of time? When does eligibility begin? When does eligibility end?
Full-time position Temporary position (not seasonal) 30 hours per week consistently For the duration of the appointment, which is at least 3 months  First of the month after receipt of the ESR eligibility certification form End of appointment or applicable stability period
Hours vary from week to week Regular or temporary position Average of 30 or more hours per week 12 months from the date of service (initial measurement period) 30 days after the measurement period ends End of 12 months (initial stability period)
More than one job Any combination of regular or temporary positions Average of 30 or more hours per week total 12 months from the date of service (initial measurement period) 30 days after the measurement period ends End of 12 months (initial stability period)

Note: Once a new hire has completed an initial measurement period, he or she will be treated as an ongoing employee, subject to the standard measurement and stability periods.

Medical Benefits Eligibility for Ongoing Employees Under ESR
Work schedule Type of position How many hours worked? Over what period of time? When does eligibility begin? When does eligibility end?
Full time position Temporary position (not seasonal) 30 hours per week consistently For the duration of the appointment, which is at least 3 months  First of the month after receipt of the ESR eligibility certification form End of appointment or applicable stability period
Hours vary from week to week Regular or temporary position Average of 30 or more hours per week October 15 – October 14 January 1 December 31
More than one job Any combination of regular or temporary positions Average of 30 or more hours per week total October 15 – October 14 January 1 December 31

Extended Medical Benefits Eligibility as of January 1, 2016

Certain benefits-eligible employees may also be able to extend eligibility for medical benefits through the end of the calendar year or current stability period under the expansion of coverage.

Type of change New position details What happens to eligibility under ESR? When does eligibility under ESR end?
Reduction in hours or change to benefits-ineligible position In the absence of ESR, ineligible for medical benefits Maintain eligibility December 31 of the current or following year, depending on when qualifying hours were worked
Break in service less than 26 weeks (not longer than previous employment), returning to benefits-ineligible position In the absence of ESR, ineligible for medical benefits Resume eligibility December 31 of the current or following year, depending on when qualifying hours were worked

Special Note on Hiring Retirees

Retirees who come back to work as temporary employees are treated the same as other employees under ESR. As a result, they may become eligible for health benefits under ESR, particularly if they return to employment within 26 weeks of retirement.  

Important: A retiree may not elect to continue retiree health benefits if he or she receives an offer of coverage under ESR.

When a retiree becomes eligible under ESR, the Benefits Office will convert the retiree health plan to ESR coverage effective the date of service or eligibility and mail a confirmation statement regarding the change. The monthly health plan premium under ESR may be higher or lower than the retiree premium, depending on individual circumstances. Retiree medical benefits will be reinstated when the individual is no longer eligible under ESR, or when he or she stops working. Note: ESR applies only to medical and prescription drug coverage. All other retiree benefits would continue without interruption for an ESR eligible retiree.

For more information,

Tracking Employee Hours to Determine Eligibility (Measurement Period)

To make sure that all non-seasonal employees who work at least 30 hours per week are offered medical coverage under the policy, the Benefits Office tracks hours worked over the course of a measurement period for all employees. For new employees, the initial measurement period is the 12 months following the date of service. For ongoing employees, the standard measurement period is October 15 to October 14. A new measurement period starts every year or after any break in service that lasts longer than 26 weeks (or longer than the employee’s previous employment at the university).

For more information, review ESR definitions.

Period of Eligibility (Stability Period)

Employees who work 30 or more hours per week during a measurement period receive an offer of medical coverage from the university. Eligibility for medical benefits lasts for the next 12 months, as long university employment continues, regardless of actual hours worked during that time. This period of eligibility is called the stability period. For new employees, the initial stability period starts 30 days after the end of the measurement period. For ongoing employees, the standard stability period is the calendar year.

For more information, review ESR definitions.

Process for Reporting Full-Time Temporary Hires

Under the policy, any unit that hires a full time temporary employee must complete the ESR eligibility certification form (updated on June 12, 2018) and return it as instructed on the form within 60 days of hire. An employee newly hired into a full time temporary position will be eligible for medical benefits as of the first of the month following receipt of the ESR eligibility certification form. This form is intended to be completed for new hires who will be working full time throughout their employment, rather than ongoing employees who may fluctuate between part time and full time. 

A full time temporary hire meets all of the following criteria:

  • At the time of hire, employee is expected to work 30 or more hours per week consistently for the duration of the appointment
  • Position expected to last three months or longer
  • Position is not seasonal (lasting six months or less and beginning in the same part of each calendar year)

In cases where a part-time temporary employee is increased to full time, the temporary employee’s hours will be tracked during a measurement period to determine future eligibility.

Send Health Care Subsidy Notices to Benefits Office

The university will receive a health care subsidy notice for any current or former employee who purchases health coverage online through the federal Health Insurance Marketplace and receives a subsidy. In many cases the Benefits Office needs to respond to these notices within 90 days to avoid potential tax penalties for the university. 

If your location receives an envelope addressed to “Benefits Manager” from the Health Insurance Marketplace/U.S. Department of Health and Human Services, please send it immediately to the Benefits Office in G405 Wolverine Tower.  Notices may initially be delivered by U.S. mail to many locations around campus, depending on what the employee entered as their employer address when applying for health coverage online.

View a sample subsidy notice envelope or a sample notice (letterhead).

Budget Considerations

Departments and units are responsible for paying the university contribution to medical benefits for newly qualifying employees who enroll in coverage, which is consistent with the way medical benefits for regular employees are funded. The average university contribution (paid by the unit) for an employee eligible for health care coverage under ESR is estimated to be $7,700 in calendar year 2018. Health coverage due to the ESR provision is an allowable direct cost and should be included in research budgets.

Eligibility for medical benefits under ESR is determined at the university level. In addition, for many employees, eligibility during a given 12-month stability period will have been determined by hours worked in the previous year, which may not correspond to their current employment. The current employing unit(s) is responsible for the university contribution to medical benefits for employees who are offered coverage and enroll.

If an employee works multiple jobs, the university contribution will be divided among employing units proportional to the employee’s earnings from each unit on a per-paycheck basis.

View employee health plan rates under ESR.

Definitions

Full time
30 hours per week is the definition of full time with respect to eligibility for medical benefits under federal law. It does not affect other definitions of full time at U-M.
Measurement period
A 12-month period in which employee hours will be tracked by the Benefits Office to determine eligibility for medical benefits. An employee who works 30 or more hours per week during the measurement period is eligible for medical benefits.
Initial measurement period
An employee’s first 12-month measurement period. The initial measurement period for new hires begins at the employee’s date of service. 
Standard measurement period
Each 12-month measurement period after the initial measurement period for ongoing employees. The standard measurement period is October 15 to October 14, for eligibility effective the following January 1. The first standard measurement period will overlap the initial measurement period for many employees.
Stability period
A 12-month period of eligibility for medical benefits for employees who are identified as eligible during a measurement period. Eligibility during a stability period is determined by hours worked during the previous measurement period. The employee remains eligible for medical benefits during the entire 12 months, regardless of hours worked, as long as university employment continues.
Initial stability period
An employee’s first 12-month stability period. The initial stability period for new hires begins 30 days after the end of the initial measurement period. 
Standard stability period
Each 12-month stability period after the initial stability period for ongoing employees. The standard stability period is January 1 to December 31, following the standard measurement period of October 15 to October 14. The first standard stability period will overlap the initial stability period for many employees.

Additional Resources 

Eligibility Certification Form

Eligibility Flow Charts and Additional Information

Fliers for Employees

Training Materials