Factors In Determining When to Start your Standard Measurement Period
Factors that influence the length and start date of your Measurement Period:
- Do you have a calendar or non-calendar year plan? Transition relief may apply for the period before the first day of the first non-calendar year plan year beginning in 2015 (the 2015 plan year) but only for employers that maintained non-calendar year plans as of Dec. 27, 2012, and only if the plan year was not modified after Dec. 27, 2012, to begin at a later calendar date.
- What is the renewal or effective date of the plan? Most employers are trying to align their Measurement, Administrative, and Stability Period with their plan year. Specifically have their Stability Period for Ongoing employees to start with their plan year.
- What is the length of the Administrative Period you are going to use? This can be anywhere between 0 and 90 days. This will be the time frame during which an employer will determine the average weekly hours of service that were worked during the Measurement Period and if employees worked 30 or more average weekly hours, the employer then must offer them an opportunity to enroll in coverage. Remember to look at the days in the months associated with your Administrative Period as some months as 30 days and others 31 which may create a 61 day Administrative Period.
- How long do you want your Measurement and Stability Periods to be? Most employers are using the longest possible Measurement Period and Stability Period. There are many reasons which include:
1) Longer Periods minimize the administrative and management burden that multiple Periods within a year would cause
2) If there is turnover then employees would fall out of longer tracking periods, and
3) A 12 month Measurement and Stability Period will allow an employer to align their tracking with their current plan offering
- Are you going to use transition relief that allows for a shorter Measurement Period and a 12 month stability period? Remember that for this year only there is transition relief that allows an employer to use a less than 12 month, but not less than 6 month Measurement Period and still apply a 12 month Stability Period. Some employers will use this if they determine it is easier to gather a shorter amount of payroll data to use for Measurement Period tracking calculations.