In our recent presentation on the ACA to not-for-profit executives, we recognized that Higher Ed administrators have pressing questions concerning guidance on calculating hours for certain positions, particularly adjunct faculty. Here is a summary of the final guidance to help you make the decisions and calculations necessary to comply with the Affordable Care Act.
A reasonable method for crediting adjuncts' hours of service
In February of this year, the IRS issued final regulations regarding the employer responsibility provisions of the ACA. Those regulations note the difficulty of measuring hours for adjunct faculty and go on to provide a general standard requiring reasonableness. They also provide one specific method of measurement that may be used. Under the method:
- 2.25 hours per week would be credited for each hour of teaching or classroom time
- 1.0 hour of service per week would be credited for each additional hour of service outside the classroom performing required duties (e.g., office hours, department meetings).
The IRS indicates that this calculation method may be relied upon through the end of 2015, possibly longer.
Note: For more (very) detailed information, the language below is taken directly from the applicable IRS guidance.
Regulation §54.4980H (Preamble)
C. Application of hours of service to certain employees.
Commenters requested guidance on the application of the hours of service definition to certain categories of employees whose hours of service are particularly challenging to identify or track or for whom the final regulations’ general rules for determining hours of service may present special difficulties…Until further guidance is issued, employers of adjunct faculty, employers of employees with layover hours, including the airline industry, and employers of employees with on-call hours, as described in sections VI.C.1 through VI.C.3 of this preamble, respectively, are required to use a reasonable method of crediting hours of service that is consistent with section 4980H. Further, employers of other employees whose hours of service are particularly challenging to identify or track or for whom the final regulations’ general rules for determining hours of service may present special difficulties, such as commissioned salespeople, are required to use a reasonable method of crediting hours of service that is consistent with section 4980H…
1. Adjunct Faculty.
Commenters raised issues relating to adjunct faculty who receive compensation for teaching a certain number of classes (or credits) and whose compensation is not based on the actual time spent on non-classroom activities such as class preparation, grading papers and exams, and counseling students…Until further guidance is issued, employers of adjunct faculty (and of employees in other positions that raise analogous issues with respect to the crediting of hours of service) are required to use a reasonable method for crediting hours of service with respect to those employees that is consistent with section 4980H…
After reviewing these comments, the Treasury Department and the IRS have determined that, until further guidance is issued, one (but not the only) method that is reasonable for this purpose would credit an adjunct faculty member of an institution of higher education with (a) 2 1/4 hours of service (representing a combination of teaching or classroom time and time performing related tasks such as class preparation and grading of examinations or papers) per week for each hour of teaching or classroom time (in other words, in addition to crediting an hour of service for each hour teaching in the classroom, this method would credit an additional 1 1/4 hours for activities such as class preparation and grading) and, separately, (b) an hour of service per week for each additional hour outside of the classroom the faculty member spends performing duties he or she is required to perform (such as required office hours or required attendance at faculty meetings).
Although further guidance may be issued regarding these matters, the method described in the preceding paragraph may be relied upon at least through the end of 2015.